BILL NUMBER: AB 266 AMENDED
BILL TEXT
AMENDED IN SENATE AUGUST 17, 2015
AMENDED IN SENATE JULY 13, 2015
AMENDED IN SENATE JUNE 30, 2015
AMENDED IN ASSEMBLY JUNE 2, 2015
AMENDED IN ASSEMBLY MAY 11, 2015
AMENDED IN ASSEMBLY MAY 5, 2015
AMENDED IN ASSEMBLY APRIL 14, 2015
INTRODUCED BY Assembly Members Bonta, Cooley, Jones-Sawyer, and
Lackey
(Coauthor: Assembly Member Chiu)
FEBRUARY 10, 2015
An act to amend Sections 2220.05, 2242, and 2264
Section 2220.05 of, to add Article 25
(commencing with Section 2525) to Chapter 5 of Division 2 of, and to
add Chapter 3.5 (commencing with Section 19300) to Division 8 of, the
Business and Professions Code, to amend Section 11552 of the
Government Code, to amend and repeal Section 11362.775 of the
Health and Safety Code, to add Sections 147.5 and 3094 to the Labor
Code, and to add Section 2402.5 to the Vehicle Code, relating to
medical cannabis.
LEGISLATIVE COUNSEL'S DIGEST
AB 266, as amended, Bonta. Medical cannabis.
(1) Existing law, the Compassionate Use Act of 1996, an initiative
measure enacted by the approval of Proposition 215 at the November
6, 1996, statewide general election, authorizes the use of marijuana
for medical purposes. Existing law enacted by the Legislature
requires the establishment of a program for the issuance of
identification cards to qualified patients so that they may lawfully
use marijuana for medical purposes, and requires the establishment of
guidelines for the lawful cultivation of marijuana grown for medical
use. Existing law provides for the licensure of various professions
by the Department of Consumer Affairs. Existing law, the Sherman
Food, Drug, and Cosmetic Law, provides for the regulation of food,
drugs, devices, and cosmetics, as specified. A violation of that law
is a crime.
This bill would enact the Medical Cannabis Regulation and Control
Act and would establish within the office of the Governor, the
Governor's Office of Medical Cannabis Regulation to coordinate and
provide oversight of the licensing and regulation of various
commercial cannabis activities, as defined. The bill would establish
the Division of Medical Cannabis Regulation within the State Board of
Equalization, for the licensure and regulation of medical cannabis
dispensaries and transporters. The bill would establish the Division
of Medical Cannabis Manufacturing and Testing within the State
Department of Public Health for the licensing and regulation of
medical cannabis manufacturers and certified testing laboratories.
The bill would also require the Division of Medical Cannabis
Manufacturing and Testing to set specified standards for edible
cannabis products. The bill would also establish the Division of
Medical Cannabis Cultivation within the Department of Food and
Agriculture for the licensure and regulation of medical cannabis
cultivators. The bill would set forth the duties of these various
divisions. The bill would require the office, by April 1, 2016, to
convene a task force to advise the office on the development of
standards for the regulation of medical cannabis.
This bill would provide for the enforcement of the provisions of
the act and of local ordinances relating to medical cannabis by the
state and local governments and would require the office, by January
1, 2017, to develop an enforcement framework that clarifies the
enforcement roles of the state and local governments. The bill would
specify that it does not supersede the provisions of Measure D,
approved by the voters of the City of Los Angeles on the May 21,
2013, ballot and would require the State Board of Equalization to
enter into a memorandum of understanding with the City of Los Angeles
to establish specified protocols, including tracking medical
cannabis to and from the City of Los Angeles. The bill would exempt
facilities engaged in commercial cannabis activity within the City of
Los Angeles from the licensing requirements and would give the city
full power and authority to enforce prescribed standards and
regulations.
This bill would require, before a business granted a state license
commences operation, that the business also obtain a license or
permit from the local jurisdiction and would authorize the local
jurisdiction to regulate commercial cannabis activity in specified
ways. The bill would provide for provisional licensure to engage in
commercial cannabis activity, as specified, until the state license
application is either granted or denied or until July 1, 2017.
This bill would, by January 1, 2017, require the Division of Labor
Standards and Enforcement to develop a certification program for
cannabis employees. The bill would require, by January 1, 2019, that
all persons who perform work as cannabis employees be certified or
participating in an apprenticeship program, as provided.
This bill would establish the Medical Cannabis Regulation Fund and
various accounts within that fund for the collection of fines and
fees imposed on the licensees conducting commercial cannabis
activities.
(2) Existing law establishes the Division of Apprenticeship
Standards, which audits and regulates apprenticeship programs for
various trades, including electricians.
This bill would require the division to investigate, approve, or
reject applications for apprenticeship employees of a licensed
cultivation site or a licensed dispensing facility, as defined.
(3) Existing law, the Medical Practice Act, provides for the
licensure and regulation of physicians and surgeons by the Medical
Board of California. Existing law requires the board to prioritize
investigations and prosecutions of physicians and surgeons
representing the greatest threat of harm, as specified. Existing law
identifies the cases that are to be given priority, which include
cases of repeated acts of excessively prescribing, furnishing, or
administering controlled substances without a good faith prior
examination of the patient. Existing law sets forth the conduct that
would constitute unprofessional conduct for a physician and surgeon,
including, but not limited to, prescribing certain drugs without an
appropriate examination or medical indication. Existing law provides
that a violation of the Medical Practice Act is a crime.
This bill would require the board to consult with the Center for
Medicinal Cannabis Research on developing and adopting medical
guidelines for the appropriate administration and use of marijuana.
The bill would also make it a misdemeanor for a physician and
surgeon who recommends marijuana to a patient for a medical purpose
to accept, solicit, or offer any remuneration from or to a licensed
dispensing facility in which the physician and surgeon or his or her
immediate family has a financial interest. By creating a new crime,
the bill would impose a state-mandated local program.
This bill would specify that recommending marijuana to patients
without an appropriate prior examination and a medical indication is
unprofessional conduct. The bill would provide that specified acts of
recommending marijuana for medical purposes without a good faith
examination are among the types of cases that should be given
priority for investigation and prosecution by the board, as described
above. The bill would further prohibit a physician and surgeon from
recommending medical marijuana to a patient unless that person is the
patient's attending physician, as defined. Because a violation of
that provision would be a crime, the bill would impose a
state-mandated local program.
(4) Existing law exempts qualified patients, persons with valid
identification cards, and the designated primary caregivers of
qualified patients and persons with identification cards from certain
crimes, including possession of concentrated cannabis and marijuana,
cultivation of marijuana, and possession of marijuana for sale.
This bill, commencing 180 days after the Governor's Office of
Medical Cannabis Regulation posts a notice on its Internet Web site
that the licensing authorities have commenced issuing provisional
licenses, would repeal those provisions.
(5) Existing law authorizes the legislative body of a city or
county to impose various taxes, including a transactions and use tax
at a rate of 0.25%, or a multiple thereof, if approved by the
required vote of the legislative body and the required vote of
qualified voters, and limits the combined rate of transactions and
use taxes within a city or county to 2%.
This bill would authorize a county to impose a tax on the
privilege of cultivating, dispensing, producing, processing,
preparing, storing, providing, donating, selling, or distributing
medical cannabis or medical cannabis products. The bill would
authorize the tax to be imposed for either general or specific
governmental purposes. The bill would require a tax imposed pursuant
to this authority to be subject to any applicable voter approval
requirement.
(5)
(6) Existing law establishes the Department of
Motor Vehicles and the Department of the California Highway
Patrol. Existing law also prohibits and establishes standards for
driving under the influence of alcohol.
This bill would require the Department of Motor Vehicles, in
consultation with the Department of the California Highway
Patrol , to establish protocols to determine
whether a driver is operating a vehicle under the influence of
cannabis, and to develop protocols setting forth best practices to
assist law enforcement agencies. prepare and submit a
report that identifies best practices for the identification,
detection, and apprehension of drivers operating a vehicle unsafely
due to medical cannabis impairment.
(6)
(7) Existing law regulates the labor practices of
agricultural employers. Existing law establishes the Occupational
Safety and Health Standards Board within the Department of Industrial
Relations to adopt, amend, and repeal occupational safety and health
standards and establishes the Division of Occupational Safety and
Health to enforce those standards.
This bill would include licensed cultivation sites in the
definition of agricultural employer. The bill would require the
division to convene an advisory committee to evaluate whether there
is a need to develop industry-specific regulations relating to
facilities issued a conditional license.
(7)
(8) This bill would provide that its provisions are
severable.
(8)
(9) Existing constitutional provisions require that a
statute that limits the right of access to the meetings of public
bodies or the writings of public officials and agencies be adopted
with findings demonstrating the interest protected by the limitation
and the need for protecting that interest.
This bill would make legislative findings to that effect.
(9)
(10) The California Constitution requires the state to
reimburse local agencies and school districts for certain costs
mandated by the state. Statutory provisions establish procedures for
making that reimbursement.
This bill would provide that with regard to certain mandates no
reimbursement is required by this act for a specified reason.
With regard to any other mandates, this bill would provide that,
if the Commission on State Mandates determines that the bill contains
costs so mandated by the state, reimbursement for those costs shall
be made pursuant to the statutory provisions noted above.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares all of the
following:
(a) The people of California enacted the Compassionate Use Act of
1996 to ensure that seriously ill Californians have access to
cannabis for medical purposes. The Compassionate Use Act of 1996
urged the state and federal governments to implement a plan to
provide for the safe and affordable distribution of medical cannabis
to all patients in medical need of the drug.
(b) Federal enforcement authorities have recognized that in states
that have authorized cannabis use and have enacted strong and
effective regulatory and enforcement systems to control the
cultivation, distribution, sale, and possession of cannabis, conduct
in compliance with those regulatory and enforcement systems is less
likely to threaten federal priorities, and, thus, less likely to
require federal enforcement intervention (See: Memorandum For All
United States Attorneys--Guidance Regarding Marijuana Enforcement, by
James M. Cole, Deputy Attorney General, August 29, 2013).
(c) Greater certainty and minimum statewide standards are urgently
needed regarding the obligations of medical cannabis facilities, and
for the imposition and enforcement of regulations to prevent
unlawful cultivation and the diversion of cannabis to nonmedical use.
(d) The purpose of this act is to establish for California a
robust medical cannabis regulatory and enforcement system to ensure
that conduct in compliance with California's medical cannabis laws
does not threaten the federal priorities as set forth in the James M.
Cole memorandum, and, therefore, does not require federal
enforcement intervention.
(e) The California Constitution grants cities and counties the
authority to make and enforce, within their borders, "all local
police, sanitary, and other ordinances and regulations not in
conflict with the general laws." This inherent local police power
includes broad authority to determine, for purposes of public health,
safety, and welfare, the appropriate uses of land within the local
jurisdiction's borders. The police power, therefore, allows each city
and county to determine whether or not a medical cannabis dispensary
or other facility that makes medical cannabis available may operate
within its borders. This authority has been upheld by City of
Riverside v. Inland Empire Patients Health and Wellness Center, Inc.
(2013) 56 Cal.4th 729, and County of Los Angeles v. Hill (2011) 192
Cal.App.4th 861. Nothing in this act shall diminish, erode, or modify
that authority.
(f) If a city or county determines that a dispensary or other
facility that makes medical cannabis available may operate within its
borders, then there is a need for the state to license these
dispensaries and other facilities for the purpose of adopting and
enforcing protocols for security standards at dispensaries and in the
transportation of medical cannabis, as well as health and safety
standards to ensure patient safety. This licensing requirement is not
intended in any way nor shall it be construed to preempt local
ordinances, regulations, or enforcement actions regarding the sale
and use of medical cannabis, including, but not limited to, security,
signage, lighting, and inspections.
(g) To the extent that this act does not conflict with or violate
Section 11362.5 of the Health and Safety Code, nothing in this act or
Article 2 (commencing with Section 11357) or Article 2.5 (commencing
with Section 11362.7) of Chapter 6 of Division 10 of the Health and
Safety Code is intended to preempt any local ordinance regulating or
banning the cultivation, processing, manufacturing, testing,
transportation, distribution, provision, donation,
or sale of medical cannabis, or to otherwise prevent or limit a
city, county, or city and county from adopting or enforcing a zoning
ordinance or other law, ordinance, or regulation that bans or
regulates the location, operation, or establishment of any individual
or other person that cultivates, processes, possesses, stores,
manufactures, tests, transports, distributes, provides,
donates, or sells cannabis.
(h) Nothing in this act is intended to interfere with an employer'
s rights and obligations to maintain a drug and alcohol free
workplace or to require an employer to permit or accommodate the use,
consumption, possession, transfer, display, transportation, sale, or
growth of cannabis in the workplace, or to affect the ability of
employers to have policies prohibiting the use of cannabis by
employees and prospective employees, or otherwise complying with
state and federal law.
(i) Nothing in this act shall be construed to promote or
facilitate the nonmedical, recreational possession, sale, or use of
cannabis.
(j) Nothing in this act shall have a diminishing effect on the
protections granted to a patient or primary caregiver pursuant to the
Compassionate Use Act of 1996.
SEC. 2. Section 2220.05 of the Business and Professions Code is
amended to read:
2220.05. (a) In order to ensure that its resources are maximized
for the protection of the public, the Medical Board of California
shall prioritize its investigative and prosecutorial resources to
ensure that physicians and surgeons representing the greatest threat
of harm are identified and disciplined expeditiously. Cases involving
any of the following allegations shall be handled on a priority
basis, as follows, with the highest priority being given to cases in
the first paragraph:
(1) Gross negligence, incompetence, or repeated negligent acts
that involve death or serious bodily injury to one or more patients,
such that the physician and surgeon represents a danger to the
public.
(2) Drug or alcohol abuse by a physician and surgeon involving
death or serious bodily injury to a patient.
(3) Repeated acts of clearly excessive prescribing, furnishing, or
administering of controlled substances, or repeated acts of
prescribing, dispensing, or furnishing of controlled substances,
or recommending cannabis to patients for medical purposes
without a good faith prior examination of the patient and
medical reason therefor. However, in no event shall a physician and
surgeon prescribing, furnishing, or administering controlled
substances for intractable pain consistent with lawful prescribing,
including, but not limited to, Sections 725, 2241.5, and 2241.6 of
this code and Sections 11159.2 and 124961 of the Health and Safety
Code, be prosecuted for excessive prescribing and prompt review of
the applicability of these provisions shall be made in any complaint
that may implicate these provisions.
(4) Repeated acts of clearly excessive recommending of cannabis to
patients for medical purposes, or repeated acts of recommending
cannabis to patients for medical purposes without a good faith prior
examination of the patient and a medical reason for the
recommendation.
(4)
(5) Sexual misconduct with one or more patients during
a course of treatment or an examination.
(5)
(6) Practicing medicine while under the influence of
drugs or alcohol.
(b) The board may by regulation prioritize cases involving an
allegation of conduct that is not described in subdivision (a). Those
cases prioritized by regulation shall not be assigned a priority
equal to or higher than the priorities established in subdivision
(a).
(c) The Medical Board of California shall indicate in its annual
report mandated by Section 2312 the number of temporary restraining
orders, interim suspension orders, and disciplinary actions that are
taken in each priority category specified in subdivisions (a) and
(b).
SEC. 3. Section 2242 of the Business and
Professions Code is amended to read:
2242. (a) Prescribing, dispensing, or furnishing dangerous drugs
as defined in Section 4022 without an appropriate prior examination
and a medical indication, constitutes unprofessional conduct.
Recommending medical cannabis to a patient for a medical purpose
without an appropriate prior examination and a medical indication
constitutes unprofessional conduct.
(b) No licensee shall be found to have committed unprofessional
conduct within the meaning of this section if, at the time the drugs
were prescribed, dispensed, or furnished, any of the following
applies:
(1) The licensee was a designated physician and surgeon or
podiatrist serving in the absence of the patient's physician and
surgeon or podiatrist, as the case may be, and if the drugs were
prescribed, dispensed, or furnished only as necessary to maintain the
patient until the return of his or her practitioner, but in any case
no longer than 72 hours.
(2) The licensee transmitted the order for the drugs to a
registered nurse or to a licensed vocational nurse in an inpatient
facility, and if both of the following conditions exist:
(A) The practitioner had consulted with the registered nurse or
licensed vocational nurse who had reviewed the patient's records.
(B) The practitioner was designated as the practitioner to serve
in the absence of the patient's physician and surgeon or podiatrist,
as the case may be.
(3) The licensee was a designated practitioner serving in the
absence of the patient's physician and surgeon or podiatrist, as the
case may be, and was in possession of or had utilized the patient's
records and ordered the renewal of a medically indicated prescription
for an amount not exceeding the original prescription in strength or
amount or for more than one refill.
(4) The licensee was acting in accordance with Section 120582 of
the Health and Safety Code.
SEC. 4. Section 2264 of the Business and
Professions Code is amended to read:
2264. (a) The employing, directly or indirectly, the aiding, or
the abetting of any unlicensed person or any suspended, revoked, or
unlicensed practitioner to engage in the practice of medicine or any
other mode of treating the sick or afflicted which requires a license
to practice constitutes unprofessional conduct.
(b) Employment by, or other agreement with, a mandatory commercial
licensee acting pursuant to the Medical Cannabis Regulation and
Control Act or a dispensary to provide recommendations for medical
cannabis constitutes unprofessional conduct.
SEC. 5. SEC. 3. Article 25
(commencing with Section 2525) is added to Chapter 5 of Division 2 of
the Business and Professions Code, to read:
Article 25. Recommending Medical Cannabis
2525. (a) It is unlawful for a physician and surgeon who
recommends cannabis to a patient for a medical purpose to accept,
solicit, or offer any form of remuneration from or to a facility
issued a state license pursuant to Chapter 3.5 (commencing with
Section 19300) of Division 8, if the physician and surgeon or his or
her immediate family have a financial interest in that facility.
(b) For the purposes of this section, "financial interest" shall
have the same meaning as in Section 650.01.
(c) A violation of this section shall be a misdemeanor.
2525.1. The Medical Board of California shall consult with the
California Marijuana Research Program, known as the Center for
Medicinal Cannabis Research, authorized pursuant to Section 11362.9
of the Health and Safety Code, on developing and adopting medical
guidelines for the appropriate administration and use of medical
cannabis.
2525.2. A physician and surgeon shall not recommend medical
cannabis to a patient, unless that person is the patient's attending
physician, as defined by subdivision (a) of Section 11362.7 of the
Health and Safety Code.
2525.3. Recommending medical cannabis to a patient for a medical
purpose without an appropriate prior examination and a medical
indication constitutes unprofessional conduct.
2525.4. Employment by, or other agreement with, a licensee acting
pursuant to the Medical Cannabis Regulation and Control Act (Chapter
3.5 (commencing with Section 19300) of Division 8) or a dispensary
to provide recommendation for medical cannabis constitutes
unprofessional conduct.
SEC. 6. SEC. 4. Chapter 3.5
(commencing with Section 19300) is added to Division 8 of the
Business and Professions Code, to read:
CHAPTER 3.5. MEDICAL CANNABIS
Article 1. Definitions
19300. For purposes of this chapter, the following definitions
shall apply:
(a) "Accrediting body" means a nonprofit impartial organization
that requires conformance to ISO/IEC 17025 requirements and is a
signatory to the International Laboratory Accreditation Cooperation
Mutual Recognition Arrangement for Testing.
(b) "Act" means this chapter.
(c) "Batch" means a specific quantity of medical cannabis or
medical cannabis products that is intended to have uniform character
and quality, within specified limits, and is produced according to a
single manufacturing order during the same cycle of manufacture.
(a)
(d) "Cannabinoid" means a chemical compound that is
unique to and derived from cannabis, also known as phytocannabinoid.
(b)
(e) "Cannabis" means all parts of the plant Cannabis
sativa L., Cannabis indica, or Cannabis ruderalis, whether growing or
not; the seeds thereof; the resin, whether crude or purified,
extracted from any part of the plant; and every compound,
manufacture, salt, derivative, mixture, or preparation of the plant,
its seeds, or resin. "Cannabis" does not include the mature stalks of
the plant, fiber produced from the stalks, oil or cake made from the
seeds of the plant, any other compound, manufacture, salt,
derivative, mixture, or preparation of the mature stalks (except the
resin extracted therefrom), fiber, oil, or cake, or the sterilized
seed of the plant which is incapable of germination. "Cannabis" also
means the separated resin, whether crude or purified, obtained from
marijuana. Without limiting the definition, "cannabis" also means
marijuana as defined by Section 11018 of the Health and Safety Code
as enacted by Chapter 1407 of the Statutes of 1972.
(c)
(f) "Cannabis concentrate" means manufactured cannabis
that has undergone a process to concentrate the cannabinoid active
ingredient, thereby increasing the product's potency.
(d)
(g) "Caregiver" or "primary caregiver" has the same
meaning as that term is defined in Section 11362.7 of the Health and
Safety Code.
(e) "Certified testing laboratory" means a laboratory that is
certified by the State Department of Public Health to perform random
sample testing of medical cannabis pursuant to the certification
standards for these facilities promulgated by the department.
(h) "Certificate of accreditation" means a certificate issued by
an accrediting body for a licensed testing laboratory, entity, or
site to be registered in the state.
(f)
(i) "Commercial cannabis activity" means any
cultivation, possession, manufacture, processing, storing,
laboratory testing, labeling, transporting, distribution, or sale of
medical cannabis or a medical cannabis product,
or any technology platform that enables qualified patients
or primary caregivers to arrange for or facilitate any of the
above-described functions with a third party, except as set
forth in Section 19316.
(g)
(j) "Cultivation" means any activity involving the
planting, growing, harvesting, drying, processing,
curing, grading, or trimming of cannabis.
(h)
(k) "Delivery" means the commercial transfer of medical
cannabis or medical cannabis products from a dispensary , up to
an amount determined by the State Board of Equalization, to a
primary caregiver or qualified patient, as defined in Section 11362.7
of the Health and Safety Code , a testing laboratory, or to an
event or location where it will be used solely for promotional
purposes. Delivery also includes the use by a dispensary
of a third party or any technology platform that enables qualified
patients or primary caregivers to arrange for or facilitate the
commercial transfer of medical cannabis or medical cannabis products
.
(i) "Delivery service" means a person issued a state license by
the State Board of Equalization pursuant to this chapter and a local
license or permit, to deliver medical cannabis or medical cannabis
products, up to an amount determined by the department, to patients,
testing laboratories, or to events or locations where it will be used
solely for promotional purposes. A delivery service shall not be
required to obtain a transporter license.
(j)
(l) "Director" means the director of the Office of
Medical Cannabis Regulation.
(k)
(m) "Dispensary" means a physical retail establishment
operating from a fixed location, including mobile deliveries that are
expressly authorized by local ordinance originating from the
location, that makes retail sales of medical cannabis or medical
cannabis products.
(l)
(n) "Dispensing" means any activity involving the
retail sale of medical cannabis or medical cannabis products from a
dispensary.
(m)
(o) "Distribution" means the first
procurement, sale , and transport of
medical cannabis in this state. Distribution does not
include the sale of cannabis from a cultivator to a distributor.
and medical cannabis products purchased and sold
between licensed entities.
(n)
(p) "Distributor" means a person who is engaged in the
business of purchasing medical cannabis in this state
from a licensed cultivator and who then
distributes the medical cannabis to a manufacturer or dispensary.
or medical cannabis products from a licensed
manufacturer in order to distribute to other licensees.
(o)
(q) "Dried flower" means all dead medical cannabis that
has been harvested, dried, cured, or otherwise processed, excluding
leaves and stems.
(p)
(r) "Edible cannabis product" means manufactured
cannabis that is intended to be used, in whole or in part, for human
consumption, including, but not limited to, chewing gum.
(q)
(s) "Fund" means the Medical Cannabis Regulation Fund
established pursuant to Section 19361.
(r)
(t) "Identification program" means the universal
identification certificate program for licensees.
(u) "Immature plant" means a nonflowering live plant that is no
taller than eight inches and no wider than eight inches.
(s)
(v) "Labor peace agreement" means an agreement between
a licensee and a bona fide labor organization that, at a minimum,
protects the state's proprietary interests by prohibiting labor
organizations and members from engaging in picketing, work stoppages,
boycotts, and any other economic interference with the applicant's
business. This agreement means that the applicant has agreed not to
disrupt efforts by the bona fide labor organization to communicate
with, and attempt to organize and represent, the applicant's
employees. The agreement shall provide a bona fide labor organization
access at reasonable times to areas in which the applicant's
employees work, for the purpose of meeting with employees to discuss
their right to representation, employment rights under state law, and
terms and conditions of employment. This type of agreement shall not
mandate a particular method of election or certification of the bona
fide labor organization.
(t)
(w) "Licensed cultivation site" means a person
that plants, grows, cultivates, harvests, dries, or processes
facility where medical cannabis,
cannabis is planted, grown, cultivated, harvested,
dried, cured, graded, or trimmed, or that does all
or any combination of those activities, and that is issued a state
license pursuant to this chapter and a local license or permit.
(u)
(x) "Licensed dispensing facility" means a
person that provides facility where medical
cannabis, medical cannabis products, or devices for the use of
medical cannabis or medical cannabis products,
products are provided, either individually or in any
combination, and that is issued a state license pursuant
to this chapter and a local license or permit.
(v)
(y) "Licensed manufacturer" means a person that
conducts the production, preparation, propagation,
compounding, or processing or compounding of
medical cannabis or medical cannabis products, either directly or
indirectly or by extraction processes,
methods, or independently by means of chemical synthesis or by
a combination of extraction and chemical synthesis, and includes a
location that packages or repackages medical cannabis or medical
cannabis products or labeling or relabeling of
labels or relabels its container, and that has been issued
both a local license or permit and a state license pursuant to this
chapter.
(z) "Licensed testing laboratory" means a facility, entity, or
site in the state that offers or performs tests of medical cannabis
or medical cannabis products, and that is both of the following:
(1) Accredited as operating to ISO standard 17025 by an
accrediting body that is independent from all other persons involved
in the medical cannabis industry in the state.
(2) Registered with the State Department of Public Health.
(w)
(aa) "Licensed transporter" means a person issued a
state license by the State Board of Equalization to
transport medical cannabis or medical cannabis products
above a limit in an amount above a threshold
determined by the board State Board of
Equalization between facilities that have been issued a state
license or to dispensing facilities in the City of Los Angeles
pursuant to this chapter.
(x)
(ab) "Licensee" means a person issued a state license
under this chapter to engage in commercial cannabis activity.
(y)
(ac) "Licensing authority" means the state agency
responsible for granting and renewing state licenses and regulating
the relevant licensees. For licensed cultivators, the licensing
authority is the Division of Medical Cannabis Cultivation in the
Department of Food and Agriculture. For dispensaries and
transporters, the licensing authority is the Division of Medical
Cannabis Regulation within the State Board of Equalization. For
licensed manufacturers and certified testing laboratories, the
licensing authority is the Division of Medical Cannabis Manufacturing
and Testing within the State Department of Public Health.
(z)
(ad) "Live plants" means living medical cannabis
flowers and plants, including seeds, immature plants, and vegetative
stage plants.
(ae) "Lot" means a batch, or a specifically identified portion of
a batch, having uniform character and quality within specified
limits. In the case of medical cannabis or a medical cannabis product
produced by a continuous process, "lot" means a specifically
identified amount produced in a unit of time or a quantity in a
manner that ensures its having uniform character and quality within
specified limits.
(aa)
(af) "Manufactured cannabis" means raw cannabis that
has undergone a process whereby the raw agricultural product has been
transformed into a concentrate, an edible product, or a topical
product.
(ab)
(ag) "Manufacturing site" means a location that
produces, prepares, propagates, compounds, or processes
or compounds medical cannabis or medical
cannabis products, directly or indirectly, by extraction
processes, methods, independently by means of
chemical synthesis, or by a combination of extraction and chemical
synthesis, and is owned and operated by a licensee for these
activities pursuant to this chapter. activities.
(ac)
(ah) "Medical cannabis," "medical cannabis product," or
"cannabis product" means a product containing cannabis, including,
but not limited to, concentrates and extractions, intended to be sold
for use by medical cannabis patients in California pursuant to the
Compassionate Use Act of 1996 (Proposition 215).
(ad)
(ai) "Nursery" means a licensee that produces only
clones, immature plants, seeds, and other agricultural products used
specifically for the planting, propagation, and cultivation of
medical cannabis.
(ae)
(aj) "Office" means the Governor's Office of Medical
Cannabis Regulation.
(af)
(ak) "Permit," "local license," or "local permit" means
an official document granted by a local jurisdiction that
specifically authorizes a person to conduct commercial cannabis
activity in the local jurisdiction.
(ag)
(al) "Person" means an individual, firm, partnership,
joint venture, association, corporation, limited liability company,
estate, trust, business trust, receiver, syndicate, or any other
group or combination acting as a unit and includes the plural as well
as the singular number.
(am) "Pesticide" has the same meaning as defined in Section 12753
of the Food and Agricultural Code.
(ah)
(an) "State license " or "license" means a state
license issued pursuant to this chapter.
(ai)
(ao) "Topical cannabis" means a product intended for
external use.
(aj)
(ap) "Transport" means the transfer of medical cannabis
or medical cannabis products from the permitted business location of
one licensee to the permitted business location of another licensee,
or to dispensing facilities in the City of Los Angeles, for the
purposes of conducting commercial cannabis activity authorized
by licensees pursuant to this chapter.
Article 2. Administration
19301. This chapter shall be known, and may be cited, as the
Medical Cannabis Regulation and Control Act.
19302. (a) There is hereby created within the office
of the Governor, the Governor's Office of Medical Cannabis
Regulation, under the supervision and control of the Director of the
Office of Medical Cannabis Regulation, who shall be appointed by the
Governor, subject to Senate confirmation. The Governor shall
appoint the director at a salary to be fixed and determined by the
director with the approval of the Director of Finance.
The director shall receive the salary provided for by Chapter 6
(commencing with Section 11550) of Part 1 of Division 3 of Title 2 of
the Government Code.
(b) The director shall be the appointing power of all employees
within the office, and all heads of divisions, bureaus, and other
employees in the office shall be responsible to the director for the
proper carrying out of the duties and responsibilities of their
respective positions.
(c) In developing a regulatory framework pursuant to this chapter,
the director shall consult with state agencies possessing expertise
in licensure and enforcement, including, but not limited to, the
Department of Alcoholic Beverage Control and the Department of
Consumer Affairs.
(d) On or before January 1, 2017, the office shall, in
consultation with local governments, develop an enforcement framework
that clarifies the enforcement roles of the state and local
governments consistent with this chapter.
(d)
(e) The office shall have overall executive authority
and responsibility for implementation of all aspects of medical
cannabis regulation pursuant to this chapter.
(e)
(f) The office shall coordinate and provide oversight
of all activities described in this chapter. The office shall lead
all state and local authorities regarding the tracking of medical
cannabis, medical cannabis products, and licensees pursuant to this
chapter. All departments and divisions specified in Section
19304 shall report directly to the office. Any information technology
systems created to store and process data related to commercial
cannabis licensing shall be integrated, and all licensing data shall
be immediately available to each licensing authority and to the
office.
19303. The office shall maintain a registry of all permit holders
and shall maintain a record of all state licenses and commercial
cannabis activity of the permit holder throughout the length of
licensure and for a minimum of seven years following the expiration
of each license. The office shall make limited licensee information
available to a licensee so that it may verify whether it is engaging
in commercial cannabis activities with a properly licensed entity.
19304. The following entities shall report to , and be
directly accountable to , the office for their respective
designated responsibilities within the regulatory and enforcement
framework, as follows:
(a) The Division of Medical Cannabis Regulation, which is
established within the State Board of Equalization, shall do all of
the following:
(1) Be administered by a person who is hired by the State Board of
Equalization, and who shall serve in accordance with the State Civil
Service Act (Part 2 (commencing with Section 18500) of Division 5 of
Title 2 of the Government Code).
(2) Administer this chapter, as it pertains to commercial cannabis
activity relating to dispensaries and transporters.
(b) The Division of Medical Cannabis Manufacturing and Testing,
which is established within the State Department of Public Health,
shall do all of the following:
(1) Be administered by a person who is appointed by the State
Department of Public Health, and who shall serve in accordance with
the State Civil Service Act (Part 2 (commencing with Section 18500)
of Division 5 of Title 2 of the Government Code).
(2) Administer this chapter, as it pertains to manufacturing,
testing, and certification licensing of
testing laboratories for medical cannabis and medical cannabis
products.
(c) The Division of Medical Cannabis Cultivation, which is
established within the Department of Food and Agriculture, shall do
all of the following:
(1) Be administered by a person who is appointed by the Department
of Food and Agriculture, and who shall serve in accordance with the
State Civil Service Act (Part 2 (commencing with Section 18500) of
Division 5 of Title 2 of the Government Code).
(2) Administer this chapter as it pertains to cultivation of
medical cannabis.
(d) The California Environmental Protection Agency and the
California Natural Resources Agency shall coordinate and direct the
following entities in the discharge of their designated regulatory
responsibilities:
(1) The State Water Resources Control Board shall promulgate
regulations related to discharge into waterways, and diversion
therefrom, resulting from cannabis cultivation.
(2) The Department of Fish and Wildlife shall promulgate
regulations of cultivation activities for the protection
of any species affected by cultivation activity, and regulations for
any cultivation-related development, including alteration of
waterways.
(3) The Department of Pesticide Regulation shall promulgate
regulations consistent with Division 6 (commencing with Section
11401) of the Food and Agricultural Code.
(e) The Department of Justice shall conduct the following
activities:
(1) Perform criminal background checks of applicants for
licensure.
(2) Develop uniform security standards for dispensaries and all
phases of transport covered by this chapter.
(3) Provide supplemental enforcement on an as-needed basis at the
request of the office.
19305. (a) The office and licensing authorities shall have the
authority necessary for the implementation of this chapter,
including, but not limited to, all of the following:
(1) Establishing rules or regulations necessary to carry out the
purposes and intent of this chapter and to enable the office and
licensing authorities to exercise the powers and perform the duties
conferred by this chapter and in accordance with Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of
the Government Code. These rules and regulations shall not limit the
authority of a city, county, or city and county specified in Article
3 (commencing with Section 19307), or specified in Section 7 of
Article XI of the California Constitution, or any other law. For the
performance of its duties, the office has the powers set forth in
Article 2 (commencing with Section 11180) of Chapter 2 of Part 1 of
Division 3 of Title 2 of the Government Code. The office shall review
all regulations and guidance promulgated by licensing authorities in
the administration of this chapter to ensure no duplication,
overlap, or conflict, or promulgation of
inconsistent regulations occur between licensing authorities.
The office may require the licensing authorities to resubmit
regulations to the Office of Administrative Law, as it deems
necessary.
(2) Prescribing, adopting, and enforcing emergency regulations as
necessary to implement this chapter. Emergency regulations
prescribed, adopted, or enforced pursuant to this section shall be
adopted in accordance with Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code. For
purposes of that chapter, including Section 11349.6 of the
Government Code, the adoption of the regulation is an emergency and
shall be considered by the Office of Administrative Law as necessary
for the immediate preservation of the public peace, health and
safety, and general welfare.
(3) Issuing state licenses to persons for the cultivation,
distribution, manufacture, transportation, and retail sale of medical
cannabis and medical cannabis products within the state.
(4) Setting application, licensing,
Establishing procedures and associated fees for the application for
issuance of and renewal fees for of
state licenses issued pursuant to this chapter.
licenses.
(5) Establishing standards for commercial cannabis activity.
(6) Establishing procedures for the issuance, renewal,
suspension, denial, and revocation of state licenses.
(7) Imposing a penalty authorized by this chapter or any
a rule or regulation adopted pursuant to this
chapter.
(8) Taking action with respect to Approval
or denial of an application for a state license in accordance
with procedures established pursuant to this chapter.
(9) Overseeing the operation of the Medical Cannabis Regulation
Fund, established pursuant to Section 19361.
(10) Consulting with other state or local agencies, departments,
representatives of the medical cannabis community, or public or
private entities for the purposes of establishing statewide standards
and regulations.
(b) Protection of the public's health and safety shall be the
highest priority for the office and the licensing authorities in
exercising the licensing, regulatory, and disciplinary functions
pursuant to this chapter. Whenever the protection of the public's
health and safety is inconsistent with other interests sought to be
promoted, the protection of the public's health and safety shall be
paramount.
19306. (a) The office, by April 1, 2016, shall convene a task
force, which shall advise the office on the development of standards
pursuant to this chapter. The task force shall be responsible for
recommending to the office the appropriate roles of each state entity
as it pertains to this chapter, and shall recommend guidelines on
communication and information sharing between state entities, and
with local agencies, for implementation of this chapter.
Notwithstanding Section 10231.5 of the Government Code, the task
force shall submit a report on these standards, determinations, and
guidelines for implementation of this chapter to the Legislature and
state entities affected by this chapter by August 1, 2016. The report
submitted to the Legislature shall be submitted
in compliance with Section 9795 of the Government Code.
(b) The task force shall be comprised of 15
21 members, each of whom shall be appointed to a two-year
term, as follows:
(1) Four Five members to be
appointed by the Governor, as follows:
(A) A member representing counties.
(B) A member representing cities.
(C) A member representing local law enforcement.
(D) A member representing state law enforcement.
(E) A member representing medical cannabis distributors.
(2) Three Five members to be
appointed by the Speaker of the Assembly, as follows:
(A) A member representing labor.
(B) A member representing the medical cannabis
industry. product manufacturers.
(C) A member with public health expertise.
(D) A member with environmental expertise.
(E) A member representing medical cannabis testing laboratories.
(3) Three Five members to
be appointed by the Senate Committee on Rules, as follows:
(A) A member representing qualified medical cannabis patients and
caregivers.
(B) A member with environmental expertise.
(C)
(B) A member representing physicians. This member shall
have a minimum of two years experience recommending medical cannabis
to qualified patients.
(C) A member representing medical cannabis cultivators.
(D) A member representing medical cannabis dispensaries.
(E) A member representing an entity focused on the protection of
minors.
(4) The director or chief of each of the following state agencies,
or his or her designee:
(A) The Department of Food and Agriculture.
(B) State Department of Public Health.
(C) State Board of Equalization.
(D) Department of Justice.
(E) Department of the California Highway Patrol.
(F) The California Environmental Protection Agency.
(c) Task force members shall serve on a voluntary basis and shall
be responsible for costs associated with their participation in the
task force. The licensing authorities shall not be responsible for
travel costs incurred by task force members or otherwise compensating
task force members for costs associated with their participation in
the task force.
(d) Each member shall only have one vote in determinations of the
task force.
(e) The office shall not be responsible for any costs associated
with the task force.
19306.5. (a) The task force established in Section 19306 shall
work with representatives of medical cannabis patient groups and
physicians and shall, on or before July 1, 2016, establish best
practices and guidelines to ensure qualified patients have adequate
access to medical cannabis and medical cannabis products. These best
practices and guidelines shall be sent in a report to the Legislature
and to all local authorities that have implemented local ordinances
that ban exempt individuals of this chapter from engaging in
cultivation or possession of medical cannabis or medical cannabis
products within their jurisdictions.
(b) The report shall be submitted in compliance with Section 9795
of the Government Code.
(c) This section shall remain in effect only until January 1,
2017, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2017, deletes or extends
that date.
Article 3. Enforcement and Local Control
19307. (a) Each licensing authority shall work in conjunction
with local agencies for the purposes of implementing, administering,
and enforcing this chapter, and any regulations adopted pursuant to
this chapter and taking appropriate action against licensees and
others who fail to comply with this chapter or the regulations
adopted pursuant to this chapter.
(b) Peace officers , as defined in Chapter 4.5 (commencing
with Section 830) of Title 3 of Part 2 of the Penal Code, may,
in enforcing this chapter, visit and inspect the premises of a
licensee pursuant to subdivision (f) of Section 19326.
(c) Peace officers of the Department of the California Highway
Patrol, members of the University of California and California State
University police departments, and peace officers of the Department
of Parks and Recreation, as defined in subdivisions (a), (b), (c),
and (f) of Section 830.2 of the Penal Code, may, in enforcing this
chapter, visit and inspect the premises of a licensee pursuant to
subdivision (f) of Section 19326.
19308. (a) By January 1, 2017, the office shall, in
consultation with local governments, develop an enforcement framework
that clarifies the enforcement roles of the state and local
governments consistent with this chapter. Local agencies
are authorized to may enforce any state
statutory or regulatory standard.
(b) A state agency is not required by this section to enforce a
city, county, city and county, or local law, ordinance, rule, or
regulation regarding the site or operation of a facility or
transporter issued a state license.
19309. (a) For facilities issued a state license that are located
within the incorporated area of a city, the city shall have full
power and authority to enforce this chapter and the rules,
regulations, and standards regulations
promulgated by the office or any licensing authority .
Notwithstanding Sections 101375, 101400, and 101405 of the Health and
Safety Code or any contract entered into pursuant thereto, or any
other law, the city shall further assume complete responsibility for
any regulatory function relating to those licensees within the city
limits that would otherwise be performed by the county or any county
officer or employee, including a county health officer, without
liability, cost, or expense to the county.
(b) For licensed facilities located within the unincorporated area
of a county, the county shall have full power and authority to
enforce this chapter and the rules, regulations, and
standards regulations promulgated by the office
or any licensing authority .
(c) State agencies shall collaborate with local agencies to
enforce state standards and regulations to the extent that it is
within the scope of other statutory responsibilities of local
agencies and to the extent that resources for this enforcement are
available and appropriated by the local governing body to the local
agencies.
(d) Pursuant to Section 7 of Article XI of the California
Constitution, a city, county, or city and county may adopt ordinances
that establish additional standards, requirements, and regulations
for local licenses and permits for commercial cannabis activity. For
all conflicts between the state and local standards, requirements,
and regulations regarding health and safety, testing, security, and
worker protections, the state shall preempt local ordinances.
(e) Nothing in this chapter, or any regulations promulgated
thereunder, shall be deemed to limit the authority or remedies of a
city, county, or city and county under any provision of law,
including, but not limited to, Section 7 of Article XI of the
California Constitution.
19310. (a) The director of a licensing authority or a district
attorney, county counsel, city attorney, or city prosecutor may bring
an action in the name of the people of the State of California to
enjoin a violation or the threatened violation of any provision of
this chapter, including, but not limited to, a licensee's failure to
correct objectionable conditions following notice or as a result of a
rule promulgated pursuant to this chapter, and to assess and recover
civil penalties in accordance with this chapter. The action shall be
brought in the county in which the violation occurred or is
threatened to occur. A proceeding for injunctive relief brought
pursuant to this chapter shall conform to the requirements of Chapter
3 (commencing with Section 525) of Title 7 of Part 2 of the Code of
Civil Procedure.
(b) A state or local agency shall immediately notify the office
and the appropriate licensing authority of violations or arrests made
for violations over which the licensing authority has jurisdiction
that involve a licensee or licensed premises. Notice shall be given
within 10 days of the violation or arrest. The office or licensing
authority shall promptly investigate as to whether grounds exist for
suspension or revocation of the state license.
(c) This chapter shall not be construed to limit a state or local
agency's ability to investigate unlawful activity in relation to a
state license.
(d) Nothing in this chapter shall prevent a city or other local
governing body from taking action as specified in Section 19315 of
this code or Section 11362.83 of the Health and Safety Code.
(e) The office shall establish and oversee procedures
to provide any relevant state and local agencies,
including all licensing authorities, upon their request, with 24-hour
access to information to verify a state license, track
transportation manifests, and track the inventories of facilities
issued a state license. This record shall allow
These procedures shall include, but not be limite d
to, the authorization of state and local law enforcement,
agencies, and licensing entities to verify a state license and
provide summary information on licensees consisting of the name of
the licensee, the date the license was issued, the status of the
license, and the licensee's mailing address.
19312. (a) This chapter shall in no way supersede the provisions
of Measure D, approved by the voters of the City of Los Angeles on
the May 21, 2013, ballot for the city, which provides potential
limited immunity to medical cannabis businesses as defined by Measure
D consistent with the terms of the measure and local ordinances.
Notwithstanding the provisions of this part, cannabis businesses
within the City of Los Angeles shall continue to be subject to
Measure D and any and all other applicable ordinances and regulations
of the City of Los Angeles.
(b) It is the intent of the Legislature to recognize the unique
circumstances of the City of Los Angeles with respect to Measure D
and associated rules related to commercial cannabis activity. In
light of these unique circumstances, the provisions of Sections
19319 and 19338 19318.5 and 19337.1
shall apply in the City of Los Angeles.
(c) The State Board of Equalization shall enter into a memorandum
of understanding with the appropriate department or departments
of the City of Los Angeles to establish protocols for the
following:
(1) Tracking businesses granted immunity pursuant to
Measure D, as approved by the voters of the City of Los Angeles at
the May 21, 2013, general election. entities with a
business tax registration certificate of class L050, medical
marijuana collective, or its successor classification.
(2) Tracking medical cannabis and medical cannabis products to and
from the City of Los Angeles.
(3) Allowing for the legal transfer of medical cannabis and
medical cannabis products from outside the jurisdiction of the City
of Los Angeles to within the city by licensees conducting commercial
cannabis activities outside of the city.
19313. (a) The actions of a licensee or provisional licensee, its
employees, and its agents, that are permitted pursuant to both a
state license or provisional license and a license or permit issued
by the local jurisdiction following the requirements of the
applicable local ordinances, and that are conducted in accordance
with the requirements of this chapter and regulations adopted
pursuant to this chapter, are not unlawful under state law and shall
not be an offense subject to arrest, prosecution, or other sanction
under state law or be subject to a civil fine or be a basis for
seizure or forfeiture of assets under state law.
(b) The actions of a person who, in good faith and upon
investigation, allows his or her property to be used by a licensee or
provisional licensee, its employees, and its agents, as permitted
pursuant to both a state license and a local license or
permit issued by the local jurisdiction following
the requirements of the applicable local ordinances, are not unlawful
under state law and shall not be an offense subject to arrest,
prosecution, or other sanction under state law, or be subject to a
civil fine or be a basis for seizure or forfeiture of assets under
state law.
(c) Conduct that is within the scope of a license issued pursuant
to this chapter and permitted by local ordinance but not fully in
compliance with this chapter shall be subject to the enforcement
provisions of this chapter and shall not be subject to the penal
provisions of state law generally prohibiting cannabis-related
activity, unless and until the license is revoked.
(d) This section shall not be deemed to limit the authority or
remedies of a city, county, or city and county under any provision of
law, including, without limitation, Section 7 of Article XI of the
California Constitution.
19314. (a) A person engaging in commercial cannabis activity
without a license required by this chapter shall be subject to civil
penalties of up to twice the amount of the license fee for each
violation, and the office, licensing authority, or court may order
the destruction of medical cannabis associated with that violation.
Each day of operation shall constitute a separate violation of this
section. All civil penalties imposed and collected pursuant to this
section shall be deposited into the Medical Cannabis Fines and
Penalties Account established pursuant to Section 19361. A day of
operation is defined to mean any period of time within a 24-hour
period. This section shall not apply to unlicensed facilities in the
City of Los Angeles.
(b) If an action for civil penalties is brought against a
licensee pursuant to this chapter by the Attorney General, the
penalty collected shall be deposited into the General Fund. If the
action is brought by a district attorney or county counsel, the
penalty collected shall be paid to the treasurer of the county in
which the judgment was entered. If the action is brought by a city
attorney or city prosecutor, the penalty collected shall be paid to
the treasurer of the city or city and county in which the
judgment was entered. If the action is brought by a city
attorney and is adjudicated in a superior court located in the
unincorporated area or another city in the same county, the penalty
shall be paid one-half to the treasurer of the city in
which the complaining attorney has jurisdiction and one-half to the
treasurer of the county in which the judgment is entered.
(c) Notwithstanding subdivision (a), criminal penalties shall
continue to apply to an unlicensed person or entity engaging in
commercial cannabis activity in violation of this chapter, including,
but not limited to, those individuals covered under Section 11362.7
of the Health and Safety Code.
19315. (a) To the extent that this chapter does not interfere
with or violate Section 11362.5 of the Health and Safety Code, this
chapter does not, nor do Article 2 (commencing with Section 11357)
and Article 2.5 (commencing with Section 11362.7) of Chapter 6 of
Division 10 of the Health and Safety Code, prevent a city, county, or
city and county from doing any of the following:
(1) Adopting local ordinances, whether consistent or inconsistent
with this chapter, that do the following:
(A) Regulate the location, operation, or establishment of a
licensee or a person that cultivates, processes, possesses, stores,
manufactures, tests, transports, distributes, or sells medical
cannabis or medical cannabis products .
(B) Prohibit commercial cannabis activity within their
jurisdiction.
(2) Providing for the administrative, civil, or criminal
enforcement of the ordinances described in paragraph (1).
(3) Establishing a fee for the operation within its jurisdiction
of any of the following:
(A) A licensee.
(B) Another person that cultivates, processes, possesses, stores,
manufactures, tests, transports, distributes, or sells medical
cannabis or medical cannabis products.
(C) A person exempt from licensure pursuant to this chapter.
(4) Enacting and enforcing other laws or ordinances
pursuant to the authority granted by Section 7 of Article XI of the
California Constitution.
(b) To the extent that this chapter does not interfere with or
violate Section 11362.5 of the Health and Safety Code, nothing in
this chapter or in Article 2 (commencing with Section 11357) or
Article 2.5 (commencing with Section 11362.7) of Chapter 6 of
Division 10 of the Health and Safety Code, shall prevent a city,
county, or city and county from adopting or enforcing a zoning
ordinance or other law, ordinance, or regulation that bans or
regulates the location, operation, or establishment of a licensee or
other person that engages in commercial cannabis activity.
Article 4. Licensure
19316. (a) This chapter shall not apply to, and shall have no
diminishing effect on the protections granted to, a patient or a
primary caregiver pursuant to the Compassionate Use Act of 1996.
(b) (1) A qualified patient who cultivates, possesses, stores,
manufactures, or transports cannabis exclusively for his or her
personal medical use but who does not provide, donate, sell, or
distribute cannabis to any other person is not, thereby, engaged in
commercial cannabis activity and is, therefore, exempt from the
licensure requirements of this chapter.
(2) A primary caregiver who cultivates, possesses, stores,
manufactures, transports, donates, or provides cannabis exclusively
for the personal medical purposes of no more than five specified
qualified patients for whom he or she is the primary caregiver within
the meaning of Section 11362.7 of the Health and Safety Code but who
does not receive remuneration for these activities except for
compensation in full compliance with subdivision (c) of Section
11362.765 of the Health and Safety Code is not engaged in commercial
cannabis activity and is, therefore, exempt from the licensure
requirements of this chapter.
(c) To the extent that this chapter does not interfere with or
violate Section 11362.5 of the Health and Safety Code, exemption from
the license requirements of this chapter shall not limit or prevent
a city, county, or city and county from regulating or banning the
cultivation, storage, manufacture, transport, provision, or other
activity by the exempt person, or impair the enforcement of that
regulation or ban.
19317. To the extent that this chapter does not interfere with or
violate Section 11362.5 of the Health and Safety Code, the state
shall have the right and authority to conduct state licensure
activities and to regulate commercial cannabis activity pursuant to
this chapter. Local governments have the right and authority to
regulate commercial cannabis activity within their jurisdiction,
including granting or refusing to grant permits pursuant to local
ordinances. In the exercise of these rights and powers, the state and
each of its agencies, and all local agencies, are hereby deemed not
to be engaged in activities requiring licensure under this chapter.
19318. (a) Licensing authorities may issue state licenses only to
qualified applicants engaging in commercial cannabis activity
pursuant to this chapter. Except as specified in Section 19318.5,
beginning January 1, 2018, upon the date of
implementation of regulations by the licensing authorities, no
person shall engage in commercial cannabis activity without
possessing both a state license and a local permit, license, or other
authorization. For purposes of this section, "state license"
includes a provisional license issued pursuant to Article 6
(commencing with Section 19330).
(b) Local permits shall be determined by local ordinances.
Licensing authorities issuing state licenses shall have sole
authority to revoke a state license. Local agencies issuing local
permits shall have sole authority to revoke a local permit.
(c) Each applicant for a state license shall provide notice to
every affected local jurisdiction at the same time the state
application is filed. The office shall confirm with the applicant a
list of each affected local jurisdictions,
including those jurisdictions affected by potential deliveries by the
applicant.
(d) The issuance of a state license shall not, in and of itself,
authorize the recipient to begin business operations. The state
license shall certify, at a minimum, that the applicant has paid the
state licensing fee, successfully passed a criminal background check,
and met state residency requirements.
(e) Even if a state license has been granted pursuant to this
chapter, a facility shall not operate in a local jurisdiction that
prohibits the establishment of that type of business. A facility
shall not commence activity under the authority of a state license
until the applicant has obtained, in addition to the state license, a
license or permit from the local jurisdiction in which he or she
proposes to operate, following the requirements of the applicable
local ordinances.
(f) If a local government agency notifies the office or a
licensing authority and provides evidence that a licensee or
applicant within its jurisdiction is in violation of local ordinances
relating to commercial cannabis activities, the licensing authority
shall schedule a hearing within 20 days, pursuant to Section
19323, to determine whether the evidence is sufficient to
constitute grounds for the revocation of the license within
20 working days pursuant to Section 19323. license.
(g) Revocation of a state license or local license or permit shall
terminate the ability of a medical cannabis business to operate
within California until the licensing authority or local jurisdiction
reinstates or reissues the state license or local license or permit.
19318.5. (a) A licensing authority shall not issue a state
license to an applicant who proposes to operate within the City
of Los Angeles, regardless of the activity for which the license is
sought.
(b) A medical cannabis business, as defined by Measure D, within
the City of Los Angeles shall comply with all standards and
regulations applicable to the commercial cannabis activity or
activities engaged in by that medical cannabis business with respect
to all of the following:
(1) Standards , to be defined by the Division of
Medical Cannabis Manufacturing and Testing, for the production,
labeling, and manufacture of medical cannabis and medical cannabis
products, in accordance with Article 7 (commencing with Section
19332) and Article 10 (commencing with Section 19342).
(2) Standards regarding the application of pesticides, in
accordance with Article 7 (commencing with Section 19332).
(3) Regulations to be promulgated by the State Board of
Equalization, in accordance with Article 8 (commencing with Section
19334), governing dispensing facilities and transporters to the
extent that those regulations relate to health and safety standards,
environmental standards, worker protections, or security
requirements.
(4) Security measures regarding transported medical
cannabis, cannabis or medical cannabis products,
in accordance with Section 19337.
(5) Standards to be promulgated by the Division of Medical
Cannabis Manufacturing and Testing regarding health and safety, in
accordance with Article 10 (commencing with Section 19342).
(c) The City of Los Angeles shall have the full power, authority,
and discretion to enforce all standards and regulations required by
this section.
19319. (a) A licensing authority shall promulgate regulations for
implementation and of its respective
responsibilities in the enforcement of this chapter, including,
but not limited to, all of the following:
(1) A description of the various specific forms of commercial
cannabis activity to be authorized by the various types of licenses.
(2) Procedures for the issuance, renewal, suspension, denial, and
revocation of a state license and establishing related fines and
penalties to be assessed against licensees for violation of this
chapter .
(3) Procedures for appeal of fines and the appeal of denial,
suspension, or revocation of a state license.
(4) Application, licensing, and renewal forms and fees. All fees
shall be established on a scaled basis, depending on the size or tier
of the license.
(5) Time periods, not to exceed 90 days, by which the licensing
authority shall approve or deny an application for a state license.
The failure of the licensing authority to act upon an application for
licensure within the time prescribed shall not be deemed approval of
the application.
(6) Qualifications for licensees.
(7) Security requirements, including, but not limited to,
procedures for limiting access to facilities to prevent
diversion of product to nonmedical use, and for the screening
of employees. All screening processes shall adhere to guidance and
best practices established by the United States Equal Employment
Opportunity Commission, including, but not limited to, those on
hiring practices relating to the consideration of arrest and
conviction records in employment decisions under Title VII of the
Civil Rights Act of 1964. Employers shall not ask applicants
about arrests or convictions on job applications and, if and when
employers make those inquiries, the inquiries shall be limited to
convictions for which exclusion would be job related for the position
in question and consistent with business necessity or for
the purposes of compliance with the federal Commercial Motor Vehicle
Safety Act of 1986 (49 U.S.C. 2701 et seq.).
(8) Requirements to ensure that all licensees and
certified licensed testing laboratories conform
with applicable standards equivalent to state statutory
environmental, agricultural, consumer protection, and food and
product safety requirements. These standards shall be in addition,
and not limited, to any other state and local requirements.
(9) Develop procedures to ensure each licensee holds and maintains
a seller's permit required pursuant to Part 1 (commencing with
Section 6001) of Division 2 of the Revenue and Taxation Code.
(10) Establish procedures and protocols for identifying, managing,
and disposing of contaminated, adulterated, deteriorated, or excess
product.
(11) Establish advertising, marketing, signage, and labeling
requirements and restrictions.
(12) Establish procedures for the suspension, revocation, or
surrender of a state license.
(b) Each state license application approved by the respective
licensing authority pursuant to this chapter is separate and
distinct.
(c)
(b) A state license application approved by a licensing
authority pursuant to this chapter shall be valid for a period not
to exceed one year from the date of approval unless revoked or
suspended earlier than that date pursuant to this chapter or the
rules or regulations adopted pursuant to this chapter.
(d)
(c) Each licensing authority may adopt regulations for
additional licenses for commercial cannabis activity
within its statutory jurisdiction pursuant to this chapter, as deemed
necessary.
(e)
(d) Each state license application approved by a
licensing authority shall be reported to the office within 24 hours
of its approval.
(f)
(e) A licensing authority shall not issue a state
license unless the applicant has met all of the requirements of this
chapter.
(g) The regulations shall not limit the authority of a city,
county, or city and county pursuant to Section 7 of Article XI of the
California Constitution or any other law. The regulations shall do
all of the following:
(1) Establish procedures for approval, renewal, or denial of
applications for state licensure for each and every aspect of
commercial cannabis activity, including, but not limited to,
cultivation, possession, manufacture, processing, storing, laboratory
testing, labeling, transporting, distribution, and sale of cannabis.
(2) Establish applicant qualifications.
(3) Establish state licensee employee qualifications, including,
but not limited to, training and screening requirements. All
screening processes shall adhere to guidance and best practices
established by the United States Equal Employment Opportunity
Commission, including, but not limited to, those relating to hiring
practices on the consideration of arrest and conviction records in
employment decisions under Title VII of the Civil Rights Act of 1964.
(4) Establish state licensee security requirements, including, but
not limited to, procedures to limit access to facilities and to
prevent diversion of product to nonmedical use.
(5) Establish procedures and protocols for identifying, managing,
and disposing of contaminated, adulterated, deteriorated, or excess
product.
(6) Establish advertising, marketing, signage, and labeling
requirements and restrictions.
(7) Establish procedures for the suspension, revocation, or
surrender of a state license, and establishing related fines and
penalties to be assessed against licensees for violations of this
chapter.
19320. (a) An applicant for a state license shall do all of the
following:
(1) Pay the fee or fees required by this chapter for each state
license for which an application is submitted.
(2) Register with the licensing authority on forms prescribed by
the licensing authority. The forms shall contain sufficient
information to identify the licensee, including all of the following:
(A) Name of the owner or owners of a proposed facility, including
all persons or entities having an ownership interest other than a
security interest, lien, or encumbrance on property that will be used
by the applicant.
(B) The name, address, and date of birth of each principal officer
and board member.
(C) The address and telephone number of the proposed facility.
(3) Provide a description, in writing, of the scope of business of
the proposed facility.
(4) Provide evidence that the applicant and owner have been legal
full-time residents of the state for not less than three years. For
purposes of this paragraph, "applicant" means the owner or owners of
a proposed facility, including all persons or entities having an
ownership interest other than a security interest, lien, or
encumbrance on property that will be used by the facility.
(5) Provide detailed operating procedures, in writing, for the
proposed facility, which shall include, but not be limited to,
procedures for facility and operational security, prevention of
diversion, employee screening, storage of medical cannabis,
cannabis and medical cannabis products,
personnel policies, and recordkeeping procedures. All screening
processes shall adhere to guidance and best practices established by
the United States Equal Employment Opportunity Commission, including,
but not limited to, those relating to hiring practices on the
consideration of arrest and conviction records in employment
decisions under Title VII of the Civil Rights Act of 1964.
(6) Submit the applicant's fingerprint images as follows:
(A) For purposes of this paragraph, "applicant" means the owner or
owners of a proposed facility, including all persons or entities
having an ownership interest other than a security interest, lien, or
encumbrance on property that will be used by the facility. If the
owner is an entity, fingerprints shall be submitted for each person
participating in the direction, control, or management of, or having
a financial interest in, the proposed facility.
(B) The applicant shall electronically submit to the Department of
Justice fingerprint images and related information required by the
Department of Justice for the purpose of obtaining information as to
the existence and content of a record of state or federal convictions
and arrests, and information as to the existence and content of a
record of state or federal convictions and arrests for which the
Department of Justice establishes that the person is free on bail or
on his or her own recognizance, pending trial or appeal.
(C) The Department of Justice shall provide a response to the
licensing authority pursuant to paragraph (1) of subdivision (p) of
Section 11105 of the Penal Code.
(D) The licensing authority shall request from the Department of
Justice subsequent notification service, as provided pursuant to
Section 11105.2 of the Penal Code, for applicants.
(E) The Department of Justice shall charge the applicant a fee
sufficient to cover the reasonable cost of processing the requests
described in this paragraph.
(7) Provide documentation issued by the local jurisdiction in
which the proposed business is operating or will operate certifying
that the applicant is or will be in compliance with all local
ordinances and regulations.
(8) Provide evidence of the legal right to occupy and use an
established location.
(9) If the proposed facility is a cultivator or a dispensary,
provide evidence that the proposed facility is located beyond at
least a 600 foot radius from a school, as required by Section
11362.768 of the Health and Safety Code.
(10) Provide a statement, signed by the applicant under penalty of
perjury, that the information provided is true.
complete, true, and accurate.
(11) (A) For an applicant with 20 or more employees, provide a
statement that the applicant will enter into, or demonstrate that it
has already entered into, and abide by the terms of a labor peace
agreement.
(B) For the purposes of this paragraph, "employee" does not
include a supervisor.
(C) For purposes of this paragraph, "supervisor" means an
individual having authority, in the interest of the licensee, to
hire, transfer, suspend, lay off, recall, promote, discharge, assign,
reward, or discipline other employees, or responsibility to direct
them or to adjust their grievances, or effectively to recommend such
action, if, in connection with the foregoing, the exercise of that
authority is not of a merely routine or clerical nature, but requires
the use of independent judgment.
(D) Provide the applicant's seller's permit number issued pursuant
to Part 1 (commencing with Section 6001) of Division 2 of the
Revenue and Taxation Code, or indicate that the applicant is
currently applying for a seller's permit.
(12) Provide any other information required by the licensing
authority.
(13) For an applicant seeking a cultivation license, provide a
statement declaring the applicant is an "agricultural employer," as
defined in the Alatorre-Zenovich-Dunlap-Berman Agricultural Labor
Relations Act of 1975 (Part 3.5 (commencing with Section 1140) of
Division 2 of the Labor Code), to the extent not prohibited by law.
(14) For an applicant seeking a cultivator, distributor, or
dispensary license, provide a notarized statement from the owner of
real property or their agent where the cultivation, distribution,
manufacturing, or dispensing commercial medical cannabis activities
will occur, as proof to demonstrate the landowner has acknowledged
and consented to permit cultivation, distribution, or dispensary
activities to be conducted on the property by the tenant applicant.
(15) For an applicant seeking licensure as a testing laboratory,
register with the State Department of Public Health by submitting all
of the following:
(A) A completed independent laboratory registration form, as
established by the State Department of Public Health.
(B) A copy of the certificate of accreditation accompanied by the
scope of accreditation.
(C) The name, address, date of birth, and social security number
of each licensed testing laboratory employee and a copy of the
application form completed by each licensed testing laboratory
employee.
(b) Each location and each discrete use of a single location shall
require a separate state license. Each application for a state
license is separate and distinct, and the licensing authority may
charge a separate fee for each.
(c) For applicants seeking a state license to cultivate,
distribute, or manufacture, the application shall also include a
detailed description of the operating procedures for all of the
following, as applicable:
(1) Cultivation.
(2) Extraction and infusion methods.
(3) The transportation process.
(4) Inventory procedures.
(5) Quality control procedures.
19321. (a) Upon receipt of an application for licensure and the
applicable fee, each licensing authority shall make a thorough
investigation to determine whether the applicant and the premises for
which a state license is applied qualify for the state license and
whether this chapter has been complied with, and shall investigate
all relevant matters connected therewith
that may affect the public welfare and morals.
(b) A licensing authority shall deny an application if either the
applicant or the premises for which a state license is applied do not
qualify for licensure under this chapter.
(c) A licensing authority may place reasonable conditions upon
licensure if grounds exist for denial of the state license, and the
licensing authority finds those grounds may be removed by the
imposition of those conditions. However, the limitations set forth in
paragraphs (6), (15), and (18) of subdivision (d) shall not be
waived.
(d) Each A licensing authority shall
deny the application for licensure or renewal, or suspend or revoke
a state license, if any of the following conditions apply:
(1) An entity making or authorizing in any manner or by any means
a written or oral statement that is untrue or misleading and that is
known, or that by exercise of reasonable care should be known, to be
untrue or misleading.
(2) Conduct that constitutes fraud.
(3) Conduct constituting gross negligence.
(2) Conduct involving dishonesty, fraud, deceit, or gross
negligence with the intent to substantially benefit himself, herself,
or another, or to substantially injure another.
(4)
(3) Failure to comply with the provisions of this
chapter or any rule or regulation adopted pursuant to this chapter.
(5)
(4) Conduct that constitutes grounds for denial of
licensure pursuant to Chapter 2 (commencing with Section 480) of
Division 1.5.
(6)
(5) Local agencies have notified the licensing
authority or the office and provided evidence that a licensee or
applicant within its jurisdiction is in violation of local ordinances
relating to medical commercial
cannabis activities.
(7)
(6) The applicant fails to meet the requirements of
this chapter or any regulation adopted pursuant to this chapter or
any applicable city, county, or city and county ordinance or
regulation. If a local government adopts an ordinance or resolution
authorizing medical cannabis to be cultivated, manufactured, stored,
distributed, or sold within its jurisdiction, it may submit to the
office documentation detailing their renewal requirements. Failure to
submit an ordinance or resolution to the office shall not impair the
enforceability of the ordinance or resolution. Ordinances or
resolutions that are not submitted pursuant to this subdivision shall
not be considered in denial of licensure pursuant to this chapter.
(8)
(7) Granting or continuation of a state license would
be contrary to the public's safety.
(9)
(8) The applicant holding or seeking a state license
has been convicted of a misdemeanor involving moral turpitude,
excluding misdemeanors involving marijuana.
possession of a controlled substance.
(10)
(9) The application has failed to state with sufficient
specificity the jurisdiction and location at which the applicant
proposes to establish operations.
(11)
(10) The applicant, or any of its officers, directors,
or owners, is under 21 years of age.
(12)
(11) The applicant fails to provide notarized written
proof that the owner of real property or landlord has acknowledged
and consented to its tenant's proposed cultivation or dispensing of
medical cannabis or medical cannabis products.
(13)
(12) The applicant has failed to provide information
requested.
(14) The applicant, or any of its officers, directors, or owners,
has been convicted of a felony criminal conviction for the possession
for sale, sale, manufacture, transportation, or cultivation of a
controlled substance, including a narcotic drug classified in
Schedule II, III, IV, or V, but excluding marijuana, for drug
trafficking involving a minor, felonies subject to enhancements
Section 11370.4 or 11379.8 of the Health and Safety Code, a violent
felony, as specified in subdivision (c) of Section 667.5 of the Penal
Code, a serious felony as specified in subdivision (c) of Section
1192.7 of the Penal Code, a felony offense involving fraud or deceit,
or any other felony that, in the licensing authority's
determination, would impair the applicant's ability to appropriately
operate as a state licensee. The licensing authority may, at its
discretion, issue a state license to an applicant that has obtained a
certificate of rehabilitation pursuant to Section 4852.13 of the
Penal Code. It is the intent of the Legislature to further determine
the suitability of applicants for licensure with prior felonies
specific to cannabis.
(13) Unless otherwise provided by this paragraph, the applicant or
any of its officers, directors, or owners, has been convicted of a
crime or act that is substantially related to the qualifications,
functions, or duties of the business or profession for which the
application is made. For purposes of this section, a conviction means
a plea or verdict of guilty or a conviction following a plea of nolo
contendere. An action that a licensing authority is permitted to
take following the establishment of a conviction, including, but not
limited to, the issuance, renewal, suspension, and revocation of a
license for commercial cannabis activity pursuant
to this chapter, shall be held in abeyance
until after the time for appeal has elapsed, or the judgment of
conviction has been affirmed on appeal. Action may be taken when an
order granting probation is made suspending the imposition of
sentence, irrespective of a subsequent order under the provisions of
Section 1203.4, 1203.4a, or 1203.41 of the Penal Code.
(A) An applicant shall not be denied a state license if the denial
is solely based on any of the following:
(i) The applicant has been convicted of transporting a controlled
substance pursuant to Section 11352 or 11379 of the Health and Safety
Code prior to January 1, 2014, and the facts underlying the
conviction establish that the applicant did not transport the
controlled substance with the intent to sell or the intent to aid and
abet the commission of, or conspiracy to commit, a crime of
transportation of the controlled substance.
(ii) The applicant has been convicted of a felony that would not
be subject to criminal prosecution pursuant to Section 11362.5 or
11362.775 of the Health and Safety Code.
(iii) The applicant had a conviction that was subsequently
dismissed under the provisions of Section 1203.4, 1203.4a, or 1203.41
of the Penal Code.
(B) An applicant shall not be denied a state license under either
of the following conditions:
(i) The applicant has obtained a certificate of rehabilitation
pursuant to Chapter 3.5 (commencing with Section 4852.01) of Title 6
of Part 3 of the Penal Code, for a crime or act that is substantially
related to the qualifications, functions, or duties of the business
or profession for which the application is made.
(ii) The applicant has been convicted of a misdemeanor, and he or
she has met all of the applicable requirements of the criteria for
rehabilitation developed by the licensing authority to evaluate the
rehabilitation of a person when considering the denial of license.
(C) If the applicant has been convicted for a crime or act that is
substantially related to the qualifications, functions, or duties of
the business or profession for which the application is made, the
licensing authority shall conduct a thorough investigation of the
nature of the crime, conviction, circumstances, and evidence of
rehabilitation of the applicant, and evaluate the suitability of the
applicant to be issued a state license based on the evidence found
through the investigation. In the evaluation, public protection shall
take priority over rehabilitation and, where evidence of
rehabilitation and public protection are in conflict, public
protection shall take precedence.
(15)
(14) The applicant, or any of its officers, directors,
or owners, is a licensed physician making patient recommendations for
medical cannabis.
(15) The applicant or any of its officers, directors, or owners
has been subject to fines or penalties for cultivation or production
of a controlled substance on public or private lands pursuant to
Section 12025 of the Fish and Game Code.
(16)
(16) The applicant, or any of its officers, directors,
or owners, has been sanctioned by a licensing authority, the office,
or a city, county, or a city and county for unlicensed commercial
medical cannabis activities or has had a license
revoked under this chapter in the previous three years.
(17) The applicant, or any of its officers, directors, or owners,
has been subject to fines or penalty for cultivation or production of
a controlled substance on public or private lands pursuant to
Section 12025 of the Fish and Game Code.
(18)
(17) The proposed commercial medical
cannabis activity will violate any applicable local law or
ordinance.
(19)
(18) The applicant has had 20 employees or more in the
past year and failed to enter into a labor peace agreement.
(20)
(19) The applicant or the owner is unable to establish
that he or she has been a resident of the state for not less than
three years.
(21)
(20) Failure to obtain and maintain a valid seller's
permit requires required pursuant to
Part 1 (commencing with Section 6001) of the Revenue and Taxation
Code.
(21) There are pending state or local administrative actions,
judicial proceedings, or other actions initiated against the
applicant, by a city, county, or city and county under an applicable
local ordinance, or who has been determined through those proceedings
to have violated a local ordinance related to commercial cannabis
activity, or that knowingly provides false or fraudulent information
on an application for licensure.
(e) Applicants shall be notified of a denied application in
writing via personal service or mail addressed to the address of the
applicant or licensee set forth in the application. The denial letter
shall contain the detailed reasons for which the application was
denied. The applicant shall have the right to appeal the denial and
be given a hearing within 30 days of the appeal. On appeal, the
decision shall be upheld unless the applicant demonstrates that the
applicant is in fact eligible for licensure and the application is in
compliance with this chapter.
19322. (a) A licensing authority may refuse to issue, reinstate,
or renew a state license, or may suspend a state license for failure
of a licensee to resolve all outstanding final liabilities,
including, but not limited to, taxes, additions to tax, penalties,
interest, and fees that have been assessed by the State Board of
Equalization.
(1) Until the final liabilities covered by this section are
satisfied, a person named on a state license that has been suspended
pursuant to this section shall be prohibited from serving in any
capacity that is subject to licensure pursuant to this chapter, but
may act as a nonsupervising employee.
(2) All state licenses issued with the same personnel of record
that have been assessed an outstanding liability covered by this
section shall be suspended until the debt has been satisfied or until
the indebted personnel of record disassociate themselves from the
licensee.
(b) The refusal to issue a state license or the suspension of a
state license as provided by this section shall occur only if the
licensing authority has mailed a notice, prior to the refusal or
suspension, that indicates that the state license will be refused or
suspended by a date certain. This preliminary notice shall be mailed
to the licensee at least 60 days before the date certain.
(c) This section shall not apply to any outstanding final
liability if the licensee has entered into an installment payment
agreement for that liability with the State Board of Equalization and
is in compliance with the terms of that agreement.
19323. (a) Provided the applicant has not committed an act or
crime constituting grounds for the denial of licensure under Section
19321, a licensing authority may issue a state license and send a
proof of issuance to the applicant.
(b) A licensing authority shall, by regulation, prescribe
conditions upon which a person whose state license has previously
been denied, suspended, or revoked, may be issued a state license.
19324. The office may adopt regulations to limit the number of
state licenses issued pursuant to this chapter upon a finding that
the otherwise unrestricted issuance of state licenses is dangerous to
the public's health and safety.
Article 5. Regulation of Medical Cannabis
19325. (a) Except as provided in Section 11362.5 of the Health
and Safety Code and Section 19316, a person shall not sell,
distribute, provide, or donate medical cannabis or medical cannabis
products to a patient or caregiver other than at a licensed
dispensing facility or through delivery from a licensed dispensing
facility.
(b) Except as provided in Section 11362.5 of, and Article 2.5
(commencing with Section 11362.7) of Chapter 6 of Division 10 of, the
Health and Safety Code and Section 19316, a person shall not
cultivate medical cannabis other than at a licensed cultivation site.
(c) Except as provided in Section 11362.5 of, and Article 2.5
(commencing with Section 11362.7) of Chapter 6 of Division 10 of, the
Health and Safety Code and Section 19316, a person other than a
licensed manufacturer shall not manufacture or process
medical cannabis or medical cannabis products.
(d) A person other than a licensed transporter shall not transport
medical cannabis or medical cannabis products from one
facility issued a state license to another, unless otherwise
specified in this chapter.
(e) All licensees holding cultivation or manufacturing licenses
shall send all medical cannabis and medical cannabis products
cultivated or manufactured to a licensed processor for
processing and testing prior to retail or sale of medical cannabis or
medical cannabis products or to a dispensary, qualified patient, or
caregiver, according to the allowances by their license.
Type 11 licensee for quality assurance and inspection by the
Type 11 licensee and for a batch testing by a Type 8 licensee prior
to distribution to a dispensary. Those licensees holding a Type
10A license in addition to a cultivation license or a
manufacturing license shall send all medical cannabis and
medical cannabis products to a licensed processor
Type 11 licensee for presale inspection and for a
batch testing by a Type 8 licensee prior to dispensing any
product. Medical cannabis and medical cannabis products
shall not be returned to a cultivation or manufacturing licensee
unless that licensee is also a licensed dispensary. The
licensing authority shall fine a licensee who violates this
subdivision in an amount determined by the licensing authority to be
reasonable.
(f) (1) Upon receipt of medical cannabis or medical cannabis
products by a holder of a cultivation or manufacturing license, the
Type 11 licensee shall first inspect the product to ensure the
identity and quantity of the product and then send
ensure a random sample of the medical cannabis or medical
cannabis product to be is tested by a
Type 8 licensee prior to distributing the batch of medical
cannabis or medical cannabis products .
(2) Upon certification issuance of a
certificate of analysis by the Type 8 licensee that the product
is fit for manufacturing or retail, all medical cannabis and medical
cannabis products shall be processed by a certified
processor prior to retail or dispensing to undergo a
quality assurance review by the Type 11 licensee prior to
distribution to ensure the quantity and content of the medical
cannabis or medical cannabis product, and for tracking and taxation
purposes by the state. Licensed processors
cultivators and manufacturers shall package or seal all medical
cannabis and medical cannabis products in tamper-evident packaging
and use a unique identifier, such as a batch and lot number or bar
code, to identify and track the medical cannabis or medical cannabis
products. Medical cannabis and medical cannabis products shall
be labeled as required by Section 19346. All packaging and
sealing shall be completed prior to any medical
cannabis or medical cannabis products being transported or delivered
to a licensee, qualified patient, or caregiver.
(3) This section does not limit the ability of licensed
cultivators, manufacturers, and dispensaries to directly enter into
contracts with one another indicating the price and quantity of
medical cannabis or medical cannabis products to be distributed.
However, a Type 11 licensee responsible for executing the contract is
authorized to collect a fee for the services rendered, including,
but not limited to, costs incurred by a Type 8 licensee, as well as
applicable state or local taxes and fees.
(g) Medical cannabis and medical cannabis products shall be tested
by a certified licensed testing
laboratory, prior to retail sale or dispensing, as follows:
(1) Medical cannabis from dried flower shall, at a minimum, be
tested for potency, pesticides, mold, rodenticide,
and other contaminants.
(2) Medical cannabis extracts shall, at a minimum, be tested for
potency and purity of the product.
(3) This chapter shall not prohibit a licensee from performing
on-site testing for the purposes of quality assurance of the product
in conjunction with reasonable business operations. On-site testing
by the licensee shall not be certified by the Division of Medical
Cannabis Manufacturing and Testing.
(h) For purposes of this section, "license" includes a provisional
license issued pursuant to Section 19330.
(i) This section shall become operative on July 1, 2017.
19326. (a) A licensee shall not cultivate, process, store,
manufacture, transport, or sell medical cannabis or medical
cannabis products in the state unless accurate records are kept
at the licensed premises of the growing, processing, storing,
manufacturing, transporting, or selling by the licensee.
(b) A licensee shall keep, at the licensed premises, accurate
records of the specific commercial cannabis activity conducted by the
licensee. The records shall include, at a minimum, all of the
following for each batch and lot of product:
(1) The name and , address , and
license number of the supplier.
(2) The dates on which the product was received.
(3) The amounts, form, and batch and lot number.
(4) The location of the cultivation site.
(5) The name of the employee who received the product.
(6) Records demonstrating compliance by the licensee with state
and federal rules and regulations regarding reporting and taxation of
income received.
(7) Receipts for all expenditures incurred by the licensee and
banking records, if any, for all funds obtained or expended in the
performance of any activity under the authority of the state license.
(8) For licensed testing laboratories, a record of test methods
and test results, including graphs, charts, or spectra from
laboratory instrumentation.
(c) Records shall be kept for a minimum of seven years following
approval of a state license.
(d) The office, the local enforcement agency designated in
accordance with Section 19309, and any other appropriate state or
local agency may examine the books and records of a state
licensee and may visit and inspect the premises of a
state licensee, as the office or state or local
agency deems necessary to perform its duties under this chapter. All
inspections shall be conducted during standard business hours of the
licensed facility or at any other reasonable time .
Licensees or employees or representatives of licensees are prohibited
from refusing, impeding, or interfering with an inspection pursuant
to this chapter or local ordinance. A violation shall be a
misdemeanor punishable by up to one year in county jail and a fine up
to five thousand dollars ($5,000) or by civil penalties of up to
five thousand dollars ($5,000).
(e) Books or records requested by the office or an appropriate
state or local agency shall be provided by the licensee no
later than five business days after the request is made.
made available upon request.
(f) The office, the local enforcement agency designated pursuant
to Section 19309, or any other state or local agency may enter and
inspect the premises of a facility issued a state license between the
hours of 8 a.m. and 8 p.m. on any day that the facility is open, or
at any reasonable time, to ensure compliance and enforcement of the
provisions of this chapter or a local ordinance.
(g) If a licensee or an employee of a licensee refuses, impedes,
obstructs, or interferes with an inspection pursuant to this section,
the state license may be summarily suspended and the licensing
authority shall directly commence proceedings for the revocation of
the state license.
(h) If a licensee or an employee of a licensee fails to maintain
or provide the books and records required pursuant to this section,
the licensee shall be subject to a civil fine of fifteen thousand
dollars ($15,000) per individual violation.
(i) All cultivator, distributor, and dispensing licensees shall be
subject to inspection, as specified by the licensing authority, in
order to ensure compliance with this chapter, including, but not
limited to, maintaining proper documentation at each site or
facility.
19327. (a) A licensee may only hold a state license in up to two
separate license categories, as follows:
(1) Type 1, 1A, 1B, 2, and 2A ,
and 2B licensees, or a combination thereof, may apply for a
Type 6 or 7 state license, or a combination thereof.
(2) Type 6 and 7 licensees, or a combination thereof, may apply
for a Type 1, 1A, 1B, 2, 2A , and 2B state
license, or a combination thereof.
(3) Type 6 and 7 licensees, or a combination thereof, may apply
for a Type 10A state license.
(4) Type 10A licensees may apply for a Type 6 and 7 state license,
or a combination thereof.
(5) Type 1, 1A, 1B, 2, 2A , and 2B licensees,
or a combination thereof, may apply for a Type 10A state license.
(6) Type 10A licensees, may apply for Type 1, 1A, 1B,
2, 2A , and 2B state license, or a combination thereof.
(7) Type 11 licensees may apply for a Type 12 state license.
(8) Type 12 licensees may apply for a Type 11 state license.
(b) Except as provided in subdivision (a), a person or entity that
holds a state license is prohibited from licensure for any other
activity authorized under this chapter, and is prohibited from
holding an ownership interest in real property, personal property, or
other assets associated or used in any other license category.
(c) A licensee conducting commercial cannabis activity in a
jurisdiction that, prior to January 1, 2016, imposed a local
ordinance requiring a qualified businesses or individuals to
cultivate, manufacture, and dispense medical cannabis or medical
cannabis products, with all commercial cannabis activity being
conducted by a single licensee, may maintain their current categories
of licensure.
(c) (1) In a jurisdiction that adopted a local ordinance, prior to
July 1, 2015, allowing or requiring qualified businesses to
cultivate, manufacture, and dispense medical cannabis or medical
cannabis products, with all commercial cannabis activity being
conducted by a single qualified business, upon licensure that
business shall not be subject to subdivision (a) if it meets all of
the following conditions:
(A) The business was cultivating, manufacturing, and dispensing
medical cannabis or medical cannabis products on July 1, 2015, and
has continuously done so since that date.
(B) The business has been in full compliance with all applicable
local ordinances.
(C) The business is registered with the State Board of
Equalization.
(2) A business licensed pursuant to paragraph (1) is not required
to conduct all cultivation or manufacturing within the bounds of a
local jurisdiction, but all cultivation and manufacturing shall have
commenced prior to July 1, 2015, and have been in full compliance
with applicable local ordinances.
(3) A business licensed pursuant to paragraph (1) shall not be
issued a state license or local licenses or permits for commercial
cannabis activity after July 1, 2015, unless it complies with the
requirements in subdivision (a).
(d) A licensee shall not hold a cultivation license for an area
totaling more than one acre of canopy size, except as provided in
subdivision (c). For the purposes of this section, a plant count
allowed by an individual's license shall count towards the maximum
allowable canopy size pursuant to this section.
19327.2. A licensee shall not also be licensed as a retailer of
alcoholic beverages pursuant to Division 9 (commencing with Section
23000).
19328. Each licensing authority shall make recommendations to the
Legislature pertaining to the establishment of an appeals and
judicial review process for persons aggrieved by a final decision of
the licensing authority.
19329. This chapter and Article 2 (commencing with Section 11357)
and Article 2.5 (commencing with Section 11362.7) of Chapter 6 of
Division 10 of the Health and Safety Code shall not interfere with an
employer's rights and obligations to maintain a drug and alcohol
free workplace or require an employer to permit or accommodate the
use, consumption, possession, transfer, display, transportation,
sale, or growth of cannabis in the workplace or affect the ability of
employers to have policies prohibiting the use of cannabis by
employees and prospective employees, or prevent employers from
complying with state or federal law.
Article 6. Provisional Licensing
19330. (a) Each licensing authority shall, as soon as practicable
following January 1, 2016, allow a qualified applicant for licensure
to apply for, receive, and renew a provisional license to engage in
commercial cannabis activity so as to ensure an adequate supply of
medical cannabis upon full implementation of this chapter. The
provisional license shall have a scheduled expiration date, as
determined by the licensing authority.
(b) Each licensing authority shall establish appropriate fees not
to exceed the reasonable regulatory costs to the licensing authority
for the issuance and renewal of a provisional license under its
jurisdiction.
(c) Each licensing authority shall, if the applicant meets all the
requirements in this section, issue a provisional license to
individuals and entities that the licensing authority determines
were, during the three months prior to March 1, 2016, regularly
cultivating, processing, manufacturing, transporting, or distributing
medical cannabis or medical cannabis products collectively
or cooperatively in full compliance with any applicable local
ordinance, and to continue to do so until the licensee's application
for a state license has been approved or denied under this chapter,
but no later than 90 days after the licensing authority begins
accepting applications for regular state licenses. The licensing
authority may consult with relevant local agencies in making a
determination on whether a provisional license applicant is in
compliance with applicable ordinances. Priority for provisional
licensure shall be given to those businesses in compliance with local
ordinances prior to September July 1,
2015.
(d) To qualify for a provisional license, an applicant shall
disclose to the appropriate licensing authority all of the following
information in writing:
(1) The names, addresses, and dates of birth of each principal
officer, owner, or board member.
(2) The common street address and assessor's parcel number of the
property at which the licensee conducts activity under the authority
of the license.
(3) The common street address and assessor's parcel number of the
property at which cultivation activity was or is to be conducted.
(4) For the three months prior to March 1, 2016, the quantity of
cannabis cultivated, processed, manufactured, tested, transported, or
sold at a location, and the quantity expected to be cultivated,
processed, manufactured, tested, transported, or sold from March 1,
2016, to September 1, 2016, inclusive. The licensee shall make its
records of current activity, and activity for the three months prior
to March 1, 2016, available to the licensing authority upon request.
(5) For an applicant seeking a state license to
cultivate, distribute, or dispense medical cannabis,
cannabis or medical cannabis products, a
notarized statement from the owner of real property or landlord where
the licensed activities will occur, as proof to demonstrate the
landowner has acknowledged and consented to permit the proposed
activities to be conducted on the property by the tenant applicant.
(6) For an applicant seeking a license as a testing laboratory,
the applicant shall submit all of the following:
(A) A completed independent laboratory registration form, as
established by the State Department of Public Health.
(B) A copy of the contract with the accrediting body that the
licensee is applying to become accredited with, accompanied by a copy
of the proposed scope of the accreditation, or evidence that the
licensed testing laboratory has been accredited by, an accrediting
body in another jurisdiction.
(C) The name, address, date of birth, and social security number
of each licensed testing laboratory employee and a copy of the
application form completed by each licensed testing laboratory
employee.
(e) Upon receipt of the application materials and fee, if the
applicant meets all the requirements of this section and if the
applicant has not committed any act or crime constituting grounds for
the denial of licensure, the licensing authority shall issue or
renew a provisional license and send a proof of issuance or renewal
to the applicant.
(f) Notwithstanding any other provision of this section, a
licensing authority shall not issue or renew a provisional license to
an individual or entity, or for a premises, against whom there are
pending state or local administrative actions or judicial
proceedings or other actions initiated by a city, county,
or city and county under an applicable local ordinance, or who has
been determined through those proceedings to have violated a local
ordinance related to cannabis activity, or that knowingly provides
false or fraudulent information on
an application for licensure.
(g) Except as provided in subdivisions (h) and (i), a licensing
authority shall not issue or renew a provisional license to an
applicant or entity, or any of its officers, directors, or owners,
who has been convicted, as defined as a plea or verdict of guilty or
a conviction following a plea of nolo contendere, of any of the
following:
(1) A felony conviction for the possession for sale, sale,
manufacture, transportation, or cultivation of a controlled
substance.
(2) A violent felony, as specified in subdivision (c) of Section
667.5 of the Penal Code.
(3) A serious felony, as specified in subdivision (c) of Section
1192.7 of the Penal Code.
(4) A felony offense involving fraud, deceit, or embezzlement.
(5) Any other felony that, in the licensing authority's
determination, would impair the applicant's ability to appropriately
operate as a provisional licensee.
(h) An applicant shall not be denied a provisional license based
on a conviction for an offense listed in subdivision (g) in any of
the following instances:
(1) The only basis for denial under subdivision (g) is that the
applicant has been convicted of transporting a controlled substance
pursuant to Section 11352 or 11379 of the Health and Safety Code
prior to January 1, 2014, and the facts underlying the conviction
establish that the applicant did not transport the controlled
substance with the intent to sell or the intent to aid and abet the
commission of, or conspiracy to commit, the crime of transportation
of the controlled substance.
(2) The applicant has been convicted of a felony that would not be
subject to criminal prosecution pursuant to Section 11362.5 or
11362.775 of the Health and Safety Code.
(3) The applicant has obtained a certificate of rehabilitation
under Chapter 3.5 (commencing with Section 4852.01) of Title 6 of
Part 3 of the Penal Code, or the conviction was subsequently
dismissed under the provisions of Section 1203.4, 1203.4a, or 1203.41
of the Penal Code.
(i) The licensing authority shall give priority review to
applicants who have been in operation for five years prior to the
first date that applications are taken for provisional licenses, have
not been convicted of a felony, and have been in full compliance
with the local ordinances in the jurisdiction in which the applicant
proposes to operate.
(g)
(j) A provisional licensee shall comply with all
standards and requirements applicable to a licensee under this
chapter, including, but not limited to, the production,
recordkeeping, security, and transportation requirements and
standards.
(h)
(k) Beginning July 1, 2017, all commercial cannabis
activity shall be conducted between licensees of commercial
cannabis activity. licensees. If the licensing
authority has not promulgated its respective regulations by that
date, the licensing authority shall provide an extension for all
provisional licenses for applicants abiding by the provisions of this
chapter.
(i)
(l) A provisional license issued pursuant to this
section shall automatically terminate upon a licensing agency's
issuance of a regular state license.
Article 7. Licensed Cultivation Sites
19331. The Legislature finds and declares all of the following:
(a) The United States Environmental Protection Agency has not
established appropriate pesticide tolerances for, or permitted the
registration and lawful use of, pesticides on cannabis crops intended
for human consumption pursuant to the Federal Insecticide,
Fungicide, and Rodenticide Act (7 U.S.C. 136 et seq.).
(b) The use of pesticides is not adequately regulated due to the
omissions in federal law, and cannabis cultivated in California for
California patients can and often does contain pesticide residues.
(c) Lawful California medical cannabis growers and caregivers urge
the Department of Pesticide Regulation to provide guidance, in
absence of federal guidance, on whether the pesticides currently used
at most cannabis cultivation sites are actually safe for use on
cannabis intended for human consumption.
19332. (a) The Division of Medical Cannabis Cultivation in the
Department of Food and Agriculture shall promulgate regulations
governing the licensing of cultivation sites. For purposes of this
chapter, the Secretary of the Department of Food and Agriculture
shall declare medical cannabis to be an agricultural product. The
division shall, in consultation with the State Department of Public
Health and the Department of Pesticide Regulation, develop standards
for the production and labeling of all edible medical cannabis
products, standards for the use of pesticides and
rodenticides in cultivation, and maximum tolerances for
pesticides, rodenticides, pesticides
and other foreign object residue in harvested cannabis.
(b) The Department of Food and Agriculture shall have the
authority necessary for the implementation of this chapter.
Department regulations shall do all of the following:
(1) Provide that weighing or measuring devices used in connection
with the sale or distribution of medical cannabis are required to
meet standards equivalent to Division 5 (commencing with Section
12001).
(2) Require that indoor and outdoor cannabis cultivation by
licensees is conducted in accordance with state and local laws and
best practices related to land conversion, grading, electricity
usage, water usage, agricultural discharges, and similar matters.
(3) Establish cultivation protocols ensuring the quality,
availability, and safety of the medical cannabis crop, including both
indoor and outdoor cultivation standards and regulations regarding
carbon offsets for indoor cultivation.
(c) The Department of Pesticide Regulation shall promulgate
regulations that require that the application of pesticides or other
pest control in connection with the indoor or outdoor cultivation of
medical cannabis meets standards equivalent to Division 6 (commencing
with Section 11401) of the Food and Agricultural Code and its
implementing regulations.
(d) State licenses to be issued by the Division of Medical
Cannabis Cultivation are as follows:
(1) Type 1, or "specialty outdoor," for outdoor cultivation
using no artificial lighting of less than 5,000 square feet of
total canopy size on one premises , or up to 50 mature plants on
noncontiguous plots .
(2) Type 1A, or "specialty indoor," for indoor cultivation
using exclusively artificial lighting of less than 5,000 square
feet of total canopy size on one premises.
(3) Type 1B, or "specialty mixed-light," for cultivation using a
combination of natural and supplemental artificial lighting at a
maximum threshold to be determined by the licensing authority, of
less than 5,000 square feet of total canopy size on one premises.
(3)
(4) Type 2, or "small outdoor," for outdoor cultivation
using no artificial lighting between 5,001 and 10,000
square feet of total canopy size on one premises.
(4)
(5) Type 2A, or "small indoor," for indoor cultivation
using exclusively artificial lighting between 5,001 and
10,000 square feet of total canopy size on one premises.
(6) Type 2B, or "small mixed-light," for cultivation using a
combination of natural and supplemental artificial lighting at a
maximum threshold to be determined by the licensing authority,
between 5,001 and 10,000 square feet of total canopy size on one
premises.
(5)
(7) Type 3, or "outdoor," for outdoor cultivation
using no artificial lighting between 10,001 and 44,000 square
feet of total canopy size on one premises. The Division of Medical
Cannabis Cultivation shall limit the number of licenses allowed of
this type.
(8) Type 3A, or "indoor," for indoor cultivation using exclusively
artificial lighting between 10,001 and 22,000 square feet of total
canopy size on one premises. The Division of Medical Cannabis
Cultivation shall limit the number of licenses allowed of this type.
(9) Type 3B, or "mixed-light," for cultivation using a combination
of natural and supplemental artificial lighting at a maximum
threshold to be determined by the licensing authority, between 10,001
and 22,000 square feet of total canopy size on one premises. The
Division of Medical Cannabis Cultivation shall limit the number of
licenses allowed of this type.
(6)
(10) Type 4, or "nursery," for cultivation of medical
cannabis solely as a nursery. Type 4 licensees may transport live
plants.
(e) All license fees collected by the division pursuant to this
chapter shall be deposited into the Medical Cannabis Cultivation Fees
Account, which is hereby established within the fund. All moneys
within this account are available upon appropriation by the
Legislature to the division solely for the purposes of fully funding
and administering this chapter, including, but not limited to, the
costs incurred by the division for its administrative expenses and
costs and the costs of regulation.
(f)
(e) It is the intent of the Legislature to establish
appropriate protocols for the collection of the specific location of
cultivation sites.
19333. An employee engaged in commercial cannabis cultivation
activity shall be subject to Wage Order 4-2001 of the Industrial
Welfare Commission.
Article 8. Licensed Distributors, Dispensaries, and
Transporters
19334. (a) The State Board of Equalization shall promulgate
regulations governing the licensing and regulation of distributors,
dispensing facilities, and transporters. State enforcement shall be
conducted in coordination with local authorities.
(b) By March 1, 31, 2016, the State
Board of Equalization shall submit a request for proposal to the
public regarding a tracking program for medical cannabis and medical
cannabis products as part of the anti-diversion effort. The State
Board of Equalization shall choose a supplier and begin full
implementation of the program prior to the issuance of state licenses
pursuant to this chapter.
(c) State licenses to be issued by the State Board of Equalization
are as follows:
(1) Type 10, or "dispensary," for the retail of medical cannabis
or medical cannabis products. This license shall allow for delivery
where expressly authorized by local ordinance, pursuant to
subdivision (b) of Section 19340.
(2) Type 10A or "special dispensary status," for dispensers who
have no more than three licensed dispensary facilities. This license
shall allow for delivery where expressly authorized by local
ordinance, pursuant to subdivision (b) of Section 19340.
(3) Type 11, or "distributor," for the processing and
certification of the content of all medical cannabis or
medical cannabis products that are transported or delivered
by and distribution licensees. A Type 11
licensee shall hold a Type 12, or transporter, license and register
each facility location where product is sto red for the
purposes of distribution. A Type 11 licensee shall not hold a
license in any other a cultivation,
manufacturing, dispensing, or testing license category and
shall not own, or have an ownership interest in, a facility licensed
pursuant to this chapter in those categories
other than a security interest, lien, or encumbrance on
property that is used by a licensee. A Type 11 licensee shall be
bonded and insured at a minimum level established by the
licensing authority.
(4) Type 12, or "transport," for transporters of medical cannabis
or medical cannabis products. A Type 12 licensee shall be bonded
and insured at a minimum level established by the
licensing authority.
(d) The State Board of Equalization shall adopt regulations
establishing the following statewide minimum thresholds for
additional transportation security requirements, as developed by the
task force and office:
(1) Minimum additional security requirements for the
transportation of medical cannabis and medical cannabis products,
based on total retail value, weight of medical cannabis, and weight
of medical cannabis products, for an entity licensed pursuant to
Section 19332 or 19342 or paragraph (1) or (2) of subdivision (c) of
Section 19334.
(2) Minimum additional security requirements for the delivery of
medical cannabis and medical cannabis products, based on total retail
value, weight of medical cannabis, and weight of medical cannabis
products, for an entity licensed pursuant to paragraph (1) or (2) of
subdivision (c) of Section 19334, where expressly authorized by local
ordinance, pursuant to subdivision (b) of Section 19340.
19334.5. (a) The State Board of Equalization shall adopt a
medical cannabis and medical cannabis products track and trace
process for reporting the movement of cannabis items throughout the
distribution chain that also employs secure packaging and that is
capable of providing information that captures, at a minimum, all of
the following:
(1) The licensee receiving the product.
(2) The transaction date.
(3) Any other information deemed necessary by the State Board of
Equalization for the taxation and regulation of medical cannabis and
medical cannabis products.
(b) The State Board of Equalization shall receive initial funding
for subdivision (b) of Section 19334 and this section pursuant to
subdivision (d) of Section 19361.
19335. (a) The provisions of Chapter 4 (commencing with Section
55121) of Part 30 of Division 2 of the Revenue and Taxation Code
shall apply with respect to the State Board of Equalization's
collection of the fees, civil fines, and penalties imposed pursuant
to this chapter.
(b) The provisions of Chapter 8 (commencing with Section 55381) of
Part 30 of Division 2 of the Revenue and Taxation Code shall apply
with respect to the disclosure of information under this chapter.
Article 9. Licensed Transporters
19336. (a) A licensee authorized to transport, or
transport and deliver, medical cannabis
and medical cannabis products shall do so only as set forth in this
chapter.
(b) Prior to transporting or delivering medical
cannabis or medical cannabis products, a licensee authorized to
transport or deliver medical cannabis or medical
cannabis products shall do both of the following:
(1) Complete an electronic shipping manifest as prescribed by the
licensing authority. All delivery shipping manifests shall
not identify the qualified patient or primary caregiver by name or
address.
(2) Securely transmit the manifest to the licensing authority and
the licensee that will receive the medical cannabis product,
as applicable. product.
(c) During transportation or delivery,
transportation, the licensed transporter shall maintain a
physical copy of the shipping manifest and make it available upon
request to agents of the licensing authority, local law enforcement
officers, or any other designated enforcement agency.
(d) The licensee receiving the shipment shall maintain each
electronic shipping manifest and shall make it available upon request
to agents of the licensing authority, local law enforcement
officers, or any other designated enforcement agency.
(e) Upon receipt of the transported shipment, a licensee shall
submit to the licensing agency a record verifying receipt of the
shipment and the details of the shipment.
(f) When a licensing authority has knowledge that a licensee has
transported, or arranged for or facilitated the transport of, medical
cannabis or medical cannabis products in violation of this article,
the licensing authority shall summarily suspend that state license
and shall, without delay, commence proceedings for revocation of the
state license in accordance with this chapter.
19336.5. An entity licensed pursuant to Section 19332,
19334, 19332 or 19342 or paragraph (1) or
(2) of subdivision (c) of Section 19334 may transport between
licensees medical cannabis or medical cannabis products with
a total retail value, weight of medical cannabis, and weight of
medical cannabis products, in an amount below
the statewide threshold, which shall be adopted by
regulation by the licensing authority after review by the task force
and the office. minimum set pursuant to subdivision
(d) of Section 19334.
19337. (a) Transported and delivered medical
cannabis or medical cannabis products shall be transported only in a
storage compartment that is securely affixed to the interior of the
transporting vehicle and that is not visible from outside the
vehicle. This requirement shall only not
apply to licensees transporting medical cannabis or medical
cannabis products with a total retail value of at least an
amount equal to a statewide monetary threshold, which shall be
adopted by regulation by the licensing authority after review by the
task force and the office. in an amount below the
statewide minimum set pursuant to subdivision (d) of Section 19334.
(b) Except as provided in Section 19340, a
A vehicle transporting medical cannabis or medical cannabis
products shall travel only directly between licensed facilities,
unless otherwise authorized under its license. All transport
and deliveries shall be conducted between 8:00 a.m. and
8:00 p.m. Transportation and delivery of shipments
do does not have to be completed in a
single day.
(c) All transport or delivery vehicles shall be
staffed with a minimum of two direct employees of the licensee. At
least one employee shall remain with the vehicle at all times when
the vehicle contains medical cannabis or medical cannabis
products . This requirement shall only
not apply to licensees transporting medical cannabis or medical
cannabis products with a total retail value of at least an
amount equal to a statewide monetary threshold, which shall be
adopted by regulation by the licensing authority after review by the
task force and the office. below the statewide minimum
set pursuant to subdivision (d) of Section 19334.
(d) Each transport or delivery team member
shall possess documentation of licensing and a government-issued
identification card at all times when transporting or
delivering medical cannabis or medical cannabis
products and shall produce it upon the request of agents of any
licensing authority or a law enforcement official.
(e) This section shall be enforced by the Department of the
California Highway Patrol in collaboration with state and
local agencies.
19337.1. Notwithstanding Section 19337, a licensed transporter
may transport medical cannabis products to an unlicensed dispensing
facility within the City of Los Angeles, provided the following
requirements are met:
(a) The licensed transporter shall comply with subdivisions (b)
and (c) of Section 19336, except that, in complying with paragraph
(2) of subdivision (b), the licensed transporter shall securely
transmit the manifest to the licensing authority and the unlicensed
dispensing facility that will receive the medical cannabis products.
(b) The licensed transporter shall record and maintain, in both
physical and electronic format, the following information with
respect to the delivery transportation
of medical cannabis products to the unlicensed dispensing facility:
(1) The date and time of delivery.
arrival at the destination.
(2) The address of delivery. the
destination.
(3) The name and state license number of the individual
who completed the delivery. shipment.
(4) The name and the state license number of the
individual at the facility who received the delivery.
shipment.
(5) The name of the owner or operator of the facility.
(6) The name of the facility, as including
the name reflected on any signage.
(7) The quantity, or weight, and variety of all medical cannabis
products delivered. received.
(8) The source of all medical cannabis delivered.
received.
(9) The monetary amount charged and received for all medical
cannabis products delivered. received.
(c) The recorded information specified in subdivision (b) shall be
transmitted within five days to the City of Los Angeles, in a manner
to be determined and specified by the City of Los Angeles.
(d) The records required by this section shall be maintained and
made available in accordance with the provisions of Section 19326.
19338. (a) The licensing authority State
Board of Equalization shall develop a database containing the
electronic shipping manifests, which shall include, but not be
limited to, the following information:
(1) The quantity, or weight, and variety of products shipped.
(2) The estimated times of departure and arrival.
(3) The quantity, or weight, and variety of products received.
(4) The actual time of arrival.
(5) A categorization of the product.
(6) The license number issued by the State Board of Equalization.
(b) The database shall be designed to flag irregularities for a
licensing authority to investigate. An authorized
enforcement authority Licensing authorities and s
tate and local agencies may, at any time, inspect
shipments and request documentation for current inventory.
19339. (a) This chapter shall not be construed to authorize or
permit a licensee to transport or deliver, or
cause to be transported or delivered, cannabis or
cannabis products outside the state, unless authorized by federal
law.
(b) A local jurisdiction shall not prevent transportation of
medical cannabis or medical cannabis products on public roads by a
licensee transporting medical cannabis or medical cannabis products
that acts in compliance with this chapter.
(c) A local jurisdiction shall not prevent delivery of medical
cannabis or medical cannabis products on public roads by a licensee
that acts in compliance with this chapter and applicable local
ordinances.
19339.5. Notwithstanding any other law or the wage orders of the
Industrial Welfare Commission, a driver employed to transport medical
cannabis or medical cannabis products shall be entitled to overtime
pay pursuant to Section 510 of the Labor Code.
Article 9.5. Delivery
19340. (a) All mobile, vehicular, and technology
platforms that enable qualified patients or primary caregivers to
arrange for any of the above-described functions with a third party
deliveries, as defined in Section 19300, are
prohibited, except as authorized by this chapter and local ordinance.
Deliveries may only be made by an appropriately licensed
dispensary.
(b) Upon approval of the licensing authority, a licensee
licensed dispensary authorized to
provide delivery services deliver medical cannabis or
medical cann abis products shall comply with
both of the following:
(1) The city, county, or city and county in which the
premises of the licensee licensed dispensary is
located, and in which each delivery is made, must
shall specifically and by ordinance permit
delivery service by ordinance referring to this section.
delivery, as defined in Section 19300.
(2) All employees delivering medical cannabis or medical cannabis
products must shall carry a current
license authorizing those services with them during
deliveries, deliveries and a government-issued
identification, and must shall
present that license and identification upon request to
state and local law enforcement, employees of regulatory authorities,
and other state and local agencies enforcing this chapter.
(3) Delivery of medical cannabis or medical cannabis products
pursuant to this section shall comply with subdivisions (c) and (d)
of Section 19336 and subdivisions (a), (c), and (d) of Section 19337.
(c) A county shall have the authority to impose a tax, pursuant to
Section 19355, on each delivery transaction completed by a licensee.
(d) Whenever a licensing authority has knowledge that a licensee
has transported or delivered, or arranged or
facilitated the transport or delivery of, medical
cannabis or medical cannabis products in violation of this
chapter, article, the licensing authority shall
summarily suspend that facility's license and shall without delay
commence proceedings for the revocation of the license in accordance
with this chapter.
(e) All license fees collected by the licensing authority pursuant
to this chapter shall be deposited into the Medical Cannabis Retail
Fees Account, which is hereby established within the fund. All moneys
within the Medical Cannabis Retail Fees Account are available upon
appropriation to the State Board of Equalization, solely for the
purposes of fully funding and administering this chapter, including,
but not limited to, the costs incurred by the board for its
administrative expenses and costs and the costs of regulation.
(e) During delivery, the licensee shall maintain a physical copy
of the delivery request and shall make it available upon request to
agents of the licensing authority, local law enforcement officers, or
any other designated
enforcement agency. The delivery request documentation shall
comply with state and federal law regarding the protection of
confidential medical information.
(f) The patient or qualified caregiver requesting the delivery
shall maintain a copy of the delivery request and shall make it
available, upon request, to agents of the licensing authority, local
law enforcement officers, or any other designated enforcement agency.
(g) Medical cannabis or medical cannabis products shall be
delivered only in a storage compartment that is securely affixed to
the interior of the vehicle and that is not visible from outside the
vehicle. This subdivision shall not apply to licensees delivering
medical cannabis or medical cannabis products below the statewide
minimum set pursuant to subdivision (d) of Section 19334.
(h) All delivery vehicles shall be staffed with a minimum of two
direct employees of the licensee. At least one employee shall remain
with the vehicle at all times when the vehicle contains medical
cannabis or medical cannabis products. This subdivision shall not
apply to licensees delivering medical cannabis or medical cannabis
products below the statewide minimum set pursuant to subdivision (d)
of Section 19334.
(i) This section shall not be construed to authorize or permit a
licensee to deliver, or cause to be delivered, cannabis or cannabis
products outside the state, unless authorized by federal law.
(j) A local jurisdiction shall not prevent delivery of medical
cannabis or medical cannabis products on public roads by a licensee
acting in compliance with this chapter and applicable local
ordinances.
19341. Notwithstanding any other law or the wage orders of the
Industrial Welfare Commission, a driver employed to transport medical
cannabis or medical cannabis products shall be entitled to overtime
pay pursuant to Section 510 of the Labor Code.
Article 10. Licensed Manufacturers and Certified
Licensed Laboratories
19342. (a) The Division of Medical Cannabis Manufacturing and
Testing within the State Department of Public Health shall promulgate
regulations governing the licensing of cannabis manufacturers.
(b) Licenses to be issued by the division are as follows:
(1) Type 6, or "manufacturing level 1," for manufacturing sites
that produce medical cannabis products using nonvolatile solvents.
(2) Type 7, or "manufacturing level 2," for manufacturing sites
that produce medical cannabis products using volatile solvents. The
division shall limit the number of licenses of this type.
(3) Type 8, or "testing," for testing of medical cannabis and
medical cannabis products. Type 8 licensees shall have their
facilities certified licensed according
to regulations set forth by the division. A Type 8 licensee shall
not hold a license in another license category of this chapter and
shall not own or have ownership interest in a facility licensed
pursuant to this chapter.
(c) All license fees collected by the division pursuant to this
chapter shall be deposited into the Medical Cannabis Manufacturing
Fees Account, which is hereby established within the fund. All moneys
within the Medical Cannabis Manufacturing Fees Account are available
upon appropriation by the Legislature to the division, solely for
the purposes of fully funding and administering this chapter,
including, but not limited to, the costs incurred by the division for
its administrative expenses and costs and the costs of regulation.
19343. (a) The State Department of Public Health shall promulgate
standards for certification of testing laboratories to perform
random sample testing of all medical cannabis and medical cannabis
products, including standards for onsite testing.
(b) Certification of testing laboratories shall be consistent with
general requirements for the competence of testing and calibration
activities, including sampling, using standard methods established by
the International Organization for Standardization, specifically
ISO/IEC 17020 and ISO/IEC 17025.
(c) These requirements shall apply to all entities, including
third-party laboratories, engaged in the testing of medical cannabis
pursuant to this chapter.
19343. (a) For the purposes of testing medical cannabis or
medical cannabis products, licensees shall use a licensed testing
laboratory that has adopted a standard operating procedure using
methods consistent with general requirements for the competence of
testing and calibration activities, including sampling, using
standard methods established by the International Organization for
Standardization, specifically ISO/IEC 17020 and ISO/IEC 17025 to test
medical cannabis and medical cannabis products that are approved by
an accrediting body that is a signatory to the International
Laboratory Accreditation Cooperation Mutual Recognition Arrangement.
(b) An agent of a licensed testing laboratory shall obtain samples
according to a statistically valid sampling method for each lot.
(c) A licensed testing laboratory shall analyze samples according
to either of the following:
(1) The most current version of the cannabis inflorescence
monograph published by the American Herbal Pharmacopoeia.
(2) Scientifically valid methodology that is demonstrably equal or
superior to paragraph (1), in the opinion of the accrediting body.
(d) If a test result falls outside the specifications authorized
by law or regulation, the licensed testing laboratory shall follow a
standard operating procedure to confirm or refute the original
result.
(e) A licensed testing laboratory shall destroy the remains of the
sample of medical cannabis or medical cannabis product upon
completion of the analysis.
19343.2. A licensed testing laboratory shall do all of the
following:
(a) Follow the methodologies, ranges, and parameters that are
contained in the scope of the accreditation for testing medical
cannabis or medical cannabis products.
(b) Require each licensed testing laboratory employee to complete
and execute an application for employment on a form provided by the
Division of Medical Cannabis Manufacturing and Testing.
(c) Establish and follow written procedures for verifying the
experience and education of employees.
(d) Submit the registration information for each licensed testing
laboratory employee within 15 days of the employee being hired.
(e) Upon termination of the association of the registered licensed
testing laboratory employee with the licensed testing laboratory, do
all of the following:
(1) Obtain keys or other entry devices from the terminated
employee.
(2) Ensure the terminated employee can no longer gain access to
the laboratory premises.
(3) Within one business day of the termination of the employee,
notify the Division of Medical Cannabis Manufacturing and Testing of
the termination.
(f) Notify the Division of Medical Cannabis Manufacturing and
Testing within one business day after the receipt of notice of any
kind that its accreditation has been denied, suspended, or revoked.
19343.5. A licensed testing laboratory shall not handle, test, or
analyze medical cannabis or medical cannabis products unless the
licensed testing laboratory meets all of the following:
(a) Is registered by the Division of Medical Cannabis
Manufacturing and Testing.
(b) Is independent from all other persons and entities involved in
the medical cannabis industry.
(c) Is accredited by an accrediting body or has a provisional
license from the Division of Medical Cannabis Manufacturing and
Testing.
(d) Has established standard operating procedures that provide for
adequate chain of custody controls for samples transferred to the
licensed testing laboratory for testing.
19343.7. (a) A licensed testing laboratory shall issue a
certificate of analysis for each lot, with supporting data, to report
both of the following:
(1) Whether the chemical profile of the lot conforms to the
specifications of the lot for compounds, including, but not limited
to, all of the following:
(A) Tetrahydrocannabinol (THC).
(B) Tetrahydrocannabinolic Acid (THCA).
(C) Cannabidiol (CBD).
(D) Cannabidiolic Acid (CBDA).
(E) The terpenes described in the most current version of the
cannabis inflorescence monograph published by the American Herbal
Pharmacopoeia.
(F) Cannabigerol (CBG).
(G) Cannabinol (CBN).
(H) Any other compounds required by the Division of Medical
Cannabis Manufacturing and Testing.
(2) That the presence of contaminants does not exceed the levels
that are the lesser of either the most current version of the
American Herbal Pharmacopoeia monograph or the Division of Medical
Cannabis Manufacturing and Testing. For purposes of this paragraph,
contaminants includes, but is not limited to, all of the following:
(A) Residual solvent or processing chemicals.
(B) Foreign material, including, but not limited to, hair,
insects, or similar or related adulterant.
(C) Microbiological impurity, including total aerobic microbial
count, total yeast mold count, P.aeruginosa, aspergillus spp., s.
aureus, aflatoxin B1, B2, G1, or G2, or ochratoxin A.
(D) Whether the batch is within specification for odor and
appearance.
(b) Residual levels of volatile organic compounds shall be below
the lesser of either the specifications set by the United States
Pharmacopeia (U.S.P. Chapter 467) or those set by the Division of
Medical Cannabis Manufacturing and Testing.
19344. (a) A laboratory certified by the department to
perform random sample testing of medical cannabis or medical cannabis
products Except as provided in this chapter, a
licensed testing laboratory shall not acquire or receive
medical cannabis or medical cannabis products except from a licensed
facility or an unlicensed facility in the City of Los Angeles
in accordance with this chapter, and shall not distribute,
sell, deliver, transfer, transport, or dispense medical cannabis or
medical cannabis products except to the licensed facility or
unlicensed facility in the City of Los Angeles, from which the
medical cannabis or medical cannabis products were acquired or
received. All transfer or transportation shall be performed pursuant
to a specified chain of custody protocol.
(b) A licensed testing laboratory may receive and test samples of
medical cannabis or medical cannabis products from a qualified
patient or primary caregiver only if he or she presents his or her
valid recommendation for cannabis for medical purposes from a
physician. A licensed testing laboratory shall not certify samples
from a qualified patient or caregiver for resale or transfer to
another party or licensee. All tests performed by a licensed testing
laboratory for a qualified patient or caregiver shall be recorded
with the name of the qualified patient or caregiver and the amount of
medical cannabis or medical cannabis product received.
(b)
(c) The department Division of
Medical Cannabis M anufacturing and Testing shall
develop procedures to ensure that testing of cannabis occurs prior to
delivery to dispensaries or any other business, and specify how
often licensees shall test cannabis, that the cost of testing shall
be borne by the licensed cultivators, and requiring destruction of
harvested batches whose testing samples indicate noncompliance with
health and safety standards promulgated by the department,
Division of Medical Cannabis Manufacturing and
Testing, unless remedial measures can bring the cannabis into
compliance with quality assurance standards as promulgated by the
department. Division of Medical Cannabis
Manufacturing and Testing.
(c)
(d) The department Division of
Medical Cannabis Manufacturing and Testing shall establish a
certification licensing fee, and
laboratories shall pay a fee to be certified. Certification
licensed. Licensing fees shall not exceed the
reasonable regulatory cost of the certification
licensing activities.
(d) All certification fees collected by the department pursuant to
this chapter shall be deposited into the Medical Cannabis Testing
Fees Account, which is hereby established within the fund. All moneys
in the Medical Cannabis Testing Fees Account shall be available to
the division upon appropriation of the Legislature solely for the
purpose of fully funding administration of this chapter, including,
but not limited to, the costs incurred by the division for the
administrative expenses and costs and the costs of regulation.
19345. (a) The Division of Medical Cannabis Manufacturing and
Testing within the State Department of Public Health shall promulgate
the following standards:
(1) Health and safety standards applicable to all medical
cannabis, and medical cannabis products, including maximum potency
standards for medical cannabis products.
(2) Standards for licensed manufacturers of medical cannabis and
medical cannabis products, including, but not limited to, edible
products.
(b) At a minimum, the standards required by this section shall do
all of the following:
(1) Prescribe sanitation standards equivalent to the California
Retail Food Code (Part 7 (commencing with Section 113700) of Division
104 of the Health and Safety Code) for food preparation, storage,
handling, and sale of edible medical cannabis products. For purposes
of this chapter, edible medical cannabis products are deemed to be
unadulterated food products.
(2) Require that edible medical cannabis products produced,
distributed, provided, donated, or sold by licensees shall be limited
to nonpotentially hazardous food, as established by the State
Department of Public Health pursuant to Section 114365.5 of the
Health and Safety Code.
(3) Require that facilities in which edible medical cannabis
products are prepared shall be constructed in accordance with
applicable building standards, health and safety standards, and other
state laws.
(4) Require that all edible medical cannabis products shall be
packaged at the original point of preparation.
(c) No person shall engage in the manufacture, packing, or holding
of processed food containing edible cannabis unless the person has a
valid registration from the department
Division of Medical Cannabis Manufacturing and Testing pursuant
to Section 110460 of the Health and Safety Code. Health and safety
standards prescribed by this section or promulgated through
regulation may be enforced by local environmental health departments.
19346. (a) Prior to sale or distribution at a licensed dispensing
facility or an unlicensed dispensing facility in the City of Los
Angeles, medical cannabis products shall be labeled and in a
tamper-evident package. Labels and packages of medical cannabis
products shall meet the following requirements:
(1) Medical cannabis packages and labels shall not be made to be
attractive to children.
(2) All medical cannabis product labels shall include the
following information, prominently displayed and in a clear and
legible font:
(A) Manufacture date and source.
(B) The statement "KEEP OUT OF REACH OF CHILDREN AND ANIMALS" in
bold print.
(C) The statement "FOR MEDICAL USE ONLY."
(D) The statement "THE INTOXICATING EFFECTS OF THIS PRODUCT MAY BE
DELAYED BY UP TO TWO HOURS."
(E) The statement "THIS PRODUCT MAY IMPAIR THE ABILITY TO DRIVE OR
OPERATE MACHINERY. PLEASE USE EXTREME CAUTION."
(E)
(F) For packages containing only dried
cannabis, flower, the net weight of medical
cannabis in the package.
(F)
(G) A warning if nuts or other known allergens are
used.
(G)
(H) List of pharmacologically active ingredients,
including, but not limited to, tetrahydrocannabinol (THC),
cannabidiol (CBD), and other cannabinoid content, the THC and other
cannabinoid amount in milligrams per serving, servings per package,
and the THC and other cannabinoid amount in milligrams for the
package total.
(H)
(I) Clear indication, in bold type, that the product
contains medical cannabis.
(I)
(J) Identification of the source and date of
cultivation and manufacture.
(J)
(K) The date of sale.
(K)
(L) Any other requirement set by the
department. licensing authority.
(b) Only generic food names may be used to describe edible medical
cannabis products.
Article 11. Cannabis Employee Certification and Apprenticeship
19350. This article applies only to cultivation sites and
dispensaries.
19351. The Division of Labor Standards Enforcement shall do all
of the following:
(a) Maintain minimum standards for the competency and training of
employees of a licensed cultivator or dispensary through a system of
testing and certification.
(b) Maintain an advisory committee and panels as necessary to
carry out its functions under this article. There shall be employer
representation on the committee and panels.
(c) Adopt regulations as determined to be necessary to implement
this article.
(d) Issue certification cards to employees certified pursuant to
this article.
(e) Establish registration fees in an amount reasonably necessary
to implement this article, not to exceed twenty-five dollars ($25)
for the initial registration. There shall be no fee for annual
renewal of registration. Fees collected for cultivation sites and
dispensaries shall be placed into the Medical Cannabis Cultivation
Fee Account and the Medical Cannabis Retail Fee Account,
respectively.
19352. (a) By January 1, 2017, the Division of Labor Standards
Enforcement shall develop a certification program for cannabis
employees. Commencing January 1, 2019, except as provided in
subdivision (c), certification shall be required of all persons who
perform work as cannabis employees.
(b) Individuals desiring to be certified shall submit an
application for certification and examination.
(c) (1) Certification is not required for registered apprentices
working as cannabis employees as part of a state-approved
apprenticeship program. An apprentice who is within one year of
completion of his or her term of apprenticeship shall be permitted to
take the certification examination and, upon passing the
examination, shall be certified immediately upon completion of the
term of apprenticeship.
(2) Commencing January 1, 2019, an uncertified person may perform
work for which certification is otherwise required in order to
acquire the necessary on-the-job experience for certification
provided that the person shall be under the direct supervision of a
cannabis employee certified pursuant to this section who is
responsible for supervising no more than one uncertified person.
(3) The Division of Labor Standards Enforcement may develop
additional criteria governing this subdivision.
19353. (a) The following shall constitute additional grounds for
disciplinary proceedings, including suspension or revocation of the
license issued pursuant to this chapter:
(1) The licensee willfully employs one or more uncertified persons
to perform work as cannabis employees in violation of this article.
(2) The licensee willfully fails to provide adequate supervision
of uncertified workers.
(3) The licensee willfully fails to provide adequate supervision
of apprentices.
(b) The Labor Commissioner shall maintain a process for referring
cases to the appropriate licensing authority when it has been
determined that a violation of this section has likely occurred. The
Labor Commissioner shall have a memorandum of understanding with the
regulatory authorities in furtherance of this section.
(c) Upon receipt of a referral by the Labor Commissioner alleging
a violation under this section, the appropriate licensing authority
shall open an investigation. Disciplinary action against the licensee
shall be initiated within 60 days of the receipt of the referral.
The licensing authority may initiate disciplinary action against a
licensee upon his or her own investigation, the filing of a
complaint, or a finding that results from a referral from the Labor
Commissioner alleging a violation under this section. Failure of the
employer or employee to provide evidence of certification or
apprentice status shall create a rebuttable presumption of violation
of this section.
(d) This section shall become operative on January 1, 2019.
Article 12. Taxation
19355. The office and other state agencies may assist state
taxation authorities in the development of uniform policies for the
state taxation of state licensees.
19356. It is the intent of the Legislature to grant authority to
the board of supervisors of a county to impose appropriate taxes on
facilities licensed pursuant to this chapter.
19355. (a) (1) A county may impose a tax on the privilege of
cultivating, dispensing, producing, processing, preparing, storing,
providing, donating, selling, or distributing medical cannabis or
medical cannabis products by a licensee operating pursuant to Chapter
3.5 (commencing with Section 19300) of Division 8 of the Business
and Professions Code.
(2) The board of supervisors shall specify in the ordinance
proposing the tax the activities subject to the tax, the applicable
rate or rates, the method of apportionment, if necessary, and the
manner of collection of the tax. The tax may be imposed for general
governmental purposes or for purposes specified in the ordinance by
the board of supervisors.
(3) In addition to any other method of collection authorized by
law, the board of supervisors may provide for the collection of the
tax imposed pursuant to this section in the same manner, and subject
to the same penalties and priority of lien, as other charges and
taxes fixed and collected by the county. A tax imposed pursuant to
this section is a tax and not a fee or special assessment. The board
of supervisors shall specify whether the tax applies throughout the
entire county or within the unincorporated area of the county.
(4) The tax authorized by this section may be imposed upon any or
all of the activities set forth in paragraph (1), as specified in the
ordinance, regardless of whether the activity is undertaken
individually, collectively, or cooperatively, and regardless of
whether the activity is for compensation or gratuitous, as determined
by the board of supervisors.
(b) A tax imposed pursuant to this section shall be subject to
applicable voter approval requirements imposed by law.
(c) For purposes of this section, "cannabis" has the same meaning
as set forth in Section 19300.
(d) This section is declaratory of existing law and does not limit
or prohibit the levy or collection of any other fee, charge, or tax,
or a license or service fee or charge upon, or related to, the
activities set forth in subdivision (a) as otherwise provided by law.
This section shall not be construed as a limitation upon the taxing
authority of a county as provided by law.
(e) This section shall not be construed to authorize a county to
impose a sales or use tax in addition to the sales and use tax
imposed under an ordinance conforming to the provisions of Sections
7202 and 7203 of the Revenue and Taxation Code.
Article 13. Funding
19360. Each licensing authority shall establish a scale of
application, licensing, and renewal fees, based upon the cost of
enforcing this chapter, as follows:
(a) Each licensing authority shall charge each licensee a
licensure or and renewal fee.
fee, as applicable. The licensure or
and renewal fee shall be calculated to cover the
costs of administering this chapter. The licensure fee may vary
depending upon the varying costs associated with administering the
various regulatory requirements of this chapter as they relate to the
nature and scope of the different licensure activities, including,
but not limited to, the track and trace program required pursuant to
Section 19334.5, but shall not exceed the reasonable regulatory costs
to the licensing authority.
(b) The total fees assessed pursuant to this chapter, including,
but not limited to, provisional license fees set forth in Section
19330, shall be set at an amount that will fairly and proportionately
generate sufficient total revenue to fully cover the total costs of
administering this chapter.
(c) All license fees shall be set on a scaled basis by the
licensing authority, dependant dependent
on the size of the business.
(d) The licensing authority shall deposit all fees collected in a
fee account specific to that licensing authority, to be established
in the Medical Cannabis Regulation Fund. Moneys in the licensing
authority fee accounts shall be used, upon appropriation of the
Legislature, by the
designated licensing authority for the administration of this
chapter.
19361. (a) The Medical Cannabis Regulation Fund is hereby
established within the State Treasury. Notwithstanding Section
16305.7 of the Government Code, the fund shall include any interest
and dividends earned on the moneys in the fund.
(b) Except as otherwise provided, all moneys collected pursuant to
this chapter as a result of fines or penalties imposed under this
chapter shall be deposited directly into the Medical Cannabis Fines
and Penalties Account, which is hereby established within the fund,
and shall be available, upon appropriation by the Legislature to the
office, for the purposes of funding the enforcement grant program
pursuant to subdivision (c).
(c) (1) The office shall establish a grant program to allocate
moneys from the Medical Cannabis Fines and Penalties Account to state
and local entities for the following purposes:
(A) To assist with medical cannabis regulation and the enforcement
of this chapter and other state and local laws applicable to
cannabis activities.
(B) For allocation to state and local agencies and law enforcement
to remedy the environmental impacts of cannabis cultivation.
(2) The costs of the grant program under this subdivision shall,
upon appropriation by the Legislature, be paid for with moneys in the
Medical Cannabis Fines and Penalties Account.
(3) The grant program established by this subdivision shall only
be implemented after the loan specified in subdivision (d) is repaid.
(d) (1) Funds for the establishment and support of the regulatory
activities pursuant to this chapter may shall
be advanced as a General Fund or special fund loan, and shall
be repaid by the initial proceeds from fees collected pursuant to
this chapter or any rule or regulation adopted pursuant to this
chapter, by January 1, 2022. Should the initial proceeds from
fees not be sufficient to repay the loan, moneys from the Medical
Cannabis Fines and Penalties Account shall be made available to the
office, by appropriation of the Legislature ,
to repay the loan.
(2) Funds advanced pursuant to this subdivision shall be
appropriated to the office, which shall distribute the moneys to the
appropriate licensing authorities, as necessary to implement the
provisions of this chapter.
Article 14. Reporting
19363. On or before March 1 of each year, the director shall
prepare and submit to the Legislature an annual report on the office'
s activities and post the report on the office's Internet Web site.
The report shall include, but not be limited to, the following
information for the previous fiscal year:
(a) The amount of funds allocated and spent by the office and
licensing authorities for medical cannabis licensing, enforcement,
and administration.
(b) The number of state licenses issued, renewed, denied,
suspended, and revoked, by state license category.
(c) The average time for processing state license applications, by
state license category.
(d) The number and type of enforcement activities conducted by the
licensing authorities and by local law enforcement agencies in
conjunction with the licensing authorities or the office.
(e) The number, type, and amount of penalties, fines, and other
disciplinary actions taken by the licensing authorities.
Article 15. Privacy
19365. (a) Information identifying the names of patients, their
medical conditions, or the names of their primary caregivers received
and contained in records kept by the office or licensing authorities
for the purposes of administering this chapter are confidential and
shall not be disclosed pursuant to the California Public Records Act
(Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1
of the Government Code), except as necessary for authorized employees
of the State of California or any city, county, or city and county
to perform official duties pursuant to this chapter, or a local
ordinance.
(b) Nothing in this section precludes the following:
(1) Employees of any of the office or licensing authorities
notifying state or local agencies about information submitted to the
agency that the employee suspects is falsified or fraudulent.
(2) Notifications from any of the office or licensing authorities
to state or local agencies about apparent violations of this chapter
or applicable local ordinance.
(3) Verification of requests by state or local agencies to confirm
licenses and certificates issued by the regulatory authorities or
other state agency.
(4) Provision of information requested pursuant to a court order
or subpoena issued by a court or an administrative agency or local
governing body authorized by law to issue subpoenas.
(c) Information shall not be disclosed by any state or local
agency beyond what is necessary to achieve the goals of a specific
investigation, notification, or the parameters of a specific court
order or subpoena.
SEC. 5. Section 11552 of the Government
Code is amended to read:
11552. (a) Effective January 1, 1988, an annual salary of
eighty-five thousand four hundred two dollars ($85,402) shall be paid
to each of the following:
(1) Commissioner of Business Oversight.
(2) Director of Transportation.
(3) Real Estate Commissioner.
(4) Director of Social Services.
(5) Director of Water Resources.
(6) Director of General Services.
(7) Director of Motor Vehicles.
(8) Executive Officer of the Franchise Tax Board.
(9) Director of Employment Development.
(10) Director of Alcoholic Beverage Control.
(11) Director of Housing and Community Development.
(12) Director of Alcohol and Drug Programs.
(13) Director of Statewide Health Planning and Development.
(14) Director of the Department of Human Resources.
(15) Director of Health Care Services.
(16) Director of State Hospitals.
(17) Director of Developmental Services.
(18) State Public Defender.
(19) Director of the California State Lottery.
(20) Director of Fish and Wildlife.
(21) Director of Parks and Recreation.
(22) Director of Rehabilitation.
(23) Director of the Office of Administrative Law.
(24) Director of Consumer Affairs.
(25) Director of Forestry and Fire Protection.
(26) The Inspector General pursuant to Section 6125 of the Penal
Code.
(27) Director of Child Support Services.
(28) Director of Industrial Relations.
(29) Director of Toxic Substances Control.
(30) Director of Pesticide Regulation.
(31) Director of Managed Health Care.
(32) Director of Environmental Health Hazard Assessment.
(33) Director of California Bay-Delta Authority.
(34) Director of California Conservation Corps.
(35) Director of Technology.
(36) Director of Emergency Services.
(37) Director of the Office of Medical Cannabis Regulation.
(b) The annual compensation provided by this section shall be
increased in any fiscal year in which a general salary increase is
provided for state employees. The amount of the increase provided by
this section shall be comparable to, but shall not exceed, the
percentage of the general salary increases provided for state
employees during that fiscal year.
SEC. 7. SEC. 6. Section 11362.775 of
the Health and Safety Code is amended to read:
11362.775. (a) Subject to subdivision (b), qualified patients,
persons with valid identification cards, and the designated primary
caregivers of qualified patients and persons with identification
cards, who associate within the State of California in order to
collectively or cooperatively cultivate cannabis for medical
purposes, shall not solely on the basis of that fact be subject to
state criminal sanctions under Section 11357, 11358, 11359, 11360,
11366, 11366.5, or 11570.
(b) This section shall remain in effect only until 180 days after
the Governor's Office of Medical Cannabis Regulation posts a notice
on its Internet Web site that the licensing authorities have
commenced issuing provisional licenses pursuant to the Medical
Cannabis Regulation and Control Act (Chapter 3.5 (commencing with
Section 19300) of Division 8 of the Business and Professions Code),
and as of that date is repealed.
SEC. 8. SEC. 7. Section 147.5 is
added to the Labor Code, to read:
147.5. (a) By January 1, 2017, the Division of Occupational
Safety and Health shall convene an advisory committee to evaluate
whether there is a need to develop industry-specific regulations
related to the activities of facilities issued a license pursuant to
Chapter 3.5 (commencing with Section 19300) of Division 8 of the
Business and Professions Code.
(b) By July 1, 2017, the advisory committee shall present to the
board its findings and recommendations for consideration by the
board. By July 1, 2017, the board shall render a decision regarding
the adoption of industry-specific regulations pursuant to this
section.
SEC. 9. SEC. 8. Section 3094 is
added to the Labor Code, to read:
3094. The Division of Apprenticeship Standards shall investigate,
approve, or reject applications for apprenticeship programs for
employees of a licensee subject to Article 11 (commencing with
Section 19350) of Chapter 3.5 of Division 8 of the Business and
Professions Code. The Division of Apprenticeship Standards shall
adopt regulations necessary to implement and regulate the
establishment of the apprenticeship programs described in this
section.
SEC. 10. Section 2402.5 is added to the Vehicle
Code, to read:
2402.5. The Department of the California Highway Patrol shall
establish protocols to determine whether a driver is operating a
vehicle under the influence of cannabis, and shall develop protocols
setting forth best practices to assist law enforcement agencies. The
costs to the Department of the California Highway Patrol of
implementing this subdivision shall, upon appropriation by the
Legislature, be paid for with appropriations from moneys in the Fines
and Penalties Account of the Medical Cannabis Regulation Fund.
SEC. 9. Section 2402.5 is added to the
Vehicle Code , to read:
2402.5. (a) The Department of Motor Vehicles, in consultation
with the Department of the California Highway Patrol, shall prepare a
report to the Governor's Office of Medical Cannabis Regulation, the
Senate, and the Assembly that identifies best practices for the
identification, detection, and apprehension of drivers operating a
vehicle unsafely due to medical cannabis impairment.
(b) It is the intent of the Legislature that the Department of
Motor Vehicles use various resources, including, but not limited to,
peer-reviewed research and drug recognition experts to prepare the
report.
(c) The report shall include, but not be limited to, an
identification of roadside tests that enhance the ability of law
enforcement officers to detect cannabis impairment and specific
indicators that correlate performance on roadside testing with the
inability of a driver to safely operate a motor vehicle.
(d) Publication of the report shall not occur until the Department
of the California Highway Patrol concurs with its findings.
(e) The Department of Motor Vehicles and the Department of the
California Highway Patrol may contract for consultation services
necessary to complete the report and receive reimbursement for the
costs of consultation services from the Medical Cannabis Regulation
Fund.
(f) The report required pursuant to this section shall be
submitted in compliance with Section 9795 of the Government Code.
SEC. 11. SEC. 10. The provisions of
this act are severable. If any provision of this act or its
application is held invalid, that invalidity shall not affect other
provisions or applications that can be given effect without the
invalid provision or application.
SEC. 12. SEC. 11. The Legislature
finds and declares that Section 6 of this act, which adds Chapter 3.5
(commencing with Section 19300) to Division 8 of the Business and
Professions Code, imposes a limitation on the public's right of
access to the meetings of public bodies or the writings of public
officials and agencies within the meaning of Section 3 of Article I
of the California Constitution. Pursuant to that constitutional
provision, the Legislature makes the following findings to
demonstrate the interest protected by this limitation and the need
for protecting that interest:
It is necessary to maintain the confidentiality of patient and
physician information provided to the regulatory authorities in order
to protect the private medical information of patients who use
medical cannabis and to preserve the essential confidentiality of the
physician and patient relationship.
SEC. 13. SEC. 12. No reimbursement
is required by this act pursuant to Section 6 of Article XIII B of
the California Constitution for certain costs that may be incurred by
a local agency or school district because, in that regard, this act
creates a new crime or infraction, eliminates a crime or infraction,
or changes the penalty for a crime or infraction, within the meaning
of Section 17556 of the Government Code, or changes the definition of
a crime within the meaning of Section 6 of Article XIII B of the
California Constitution.
However, if the Commission on State Mandates determines that this
act contains other costs mandated by the state, reimbursement to
local agencies and school districts for those costs shall be made
pursuant to Part 7 (commencing with Section 17500) of Division 4 of
Title 2 of the Government Code.